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Agreed boundary

An agreed boundary is a real estate term you should know. Bankrate explains.

What is agreed boundary?

An agreed boundary is when property owners approve a new line dividing their properties. The line may not be the true boundary, and it does not have legal force until both parties sign a lot line agreement.

Deeper definition

When there is a dispute about the actual location of a property line, the owners can decide to settle in arbitration instead of going to court. In arbitration, they may agree to a boundary, which gives both owners control of the outcome.

Property lines that fall way over the previously surveyed line could favor one property owner over another. For this dispute, the line may be approved and become an agreed boundary if both parties are happy with the resolution. In this type of case, everyone involved is still subject to any city, state, or federal laws that apply to the land in question, and they also need to sign a lot line agreement for the boundary to hold up in court should another dispute arise.

Anything on the land or property in question is also subject to the agreed boundary. The agreed boundary is also enforceable against new owners of the property, despite what a surveyor finds to be the actual boundaries of the properties.

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Agreed boundary example

A family purchases land next to an empty lot and plans to build a house. After surveying the property, they are informed that the line is in dispute with the empty lot’s owner. After some careful negotiation between both parties, the property owners agree on a new boundary that is beneficial to both of their needs. They sign a lot line agreement to enshrine the agreed boundary into law.

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