Occasionally, a home is built a little too far to the left or the right. Typically this means it is on the neighbors’ property, which causes friction that can be resolved through- money. However, sometimes a home is built on the boundary line of two towns or even two states. This can cause problems with municipalities and mortgages, which are best, exposed and resolved in the beginning of the process.

A home built on the boundary line of two towns will have two tax bills, two water departments, fire departments, post offices and perhaps two school districts. It can cause problems for sending kids to school, getting insurance and town services such as garbage removal. If the owner wants to do improvements on the home, which building department do they get a permit from?  Often, the home is primarily in one of the towns, so the larger parcel rules. If ¾ of the parcel is in town A, then the majority of taxes should be paid there, services should be received form that town and the legal post office address will be there.  No big deal, really, unless town B has better services or schools and you need to fight to have that be your town.

When a home straddles two states, you have all of the above questions and more; here, you truly are divided between two legal districts. Each state will have some claim, but which will be the primary service provider? In addition, will you be able to get a mortgage on the home? Some lenders will not lend on a home in two states- just in case of foreclosure. If the home goes into foreclosure they will have to file legal documents in two states, argue for jurisdiction and hope there is not a defense of wrongful filing. In order to avoid any problems, the bank will not lend at all regardless of the proportions and qualifications of the borrower. This is a problem, especially now where mortgage lenders are being over cautious and conservative.

If your dream home straddles borders of towns or states, things you need to know are:

·         Legal post office address

·         Town/state which has the history of providing services

·         School district

·         If the seller has financing and is it with a conventional lender

Your attorney should be made aware of this in the beginning and order a title search and new survey right out of the gate. As a responsible buyer, you should visit the tax office, building department and post office to make sure you will not have any conflicts later on. If there are any problems to come you should know of them before you buy the house. Most importantly, if you are getting a mortgage, your lender should be aware of the situation and approve it in the beginning of the process. We just closed a loan with Wells Fargo, who had all the paperwork from the start and then when it went to the closing department, told us they could not lend on a home in two states. But you knew this!  (After days of arguing, it closed) Make sure the attorney gets the title search and survey over to the lender immediately and have their closing department review it while the loan application is being processed. This will have to manually be pushed through the system. Notify your loan officer and do not take “no problem” for your answer! To conclude, keep your paperwork in a safe place for when you want to sell the home. It will make an easier sale, if you provide your research to the new buyers- much appreciated!