I Can’t Sell My House Because of Bad Neighbors: What Do I Do?

Some neighbors don’t mean to be bad. Take those like Chicago top-selling agent Matt Laricy often encounters, where the noise of everyday life sends potential buyers fleeing once they realize that the insulation between condos is thinner than they realized.

He and his sellers once asked neighbors to not be home during an open house. The prospective buyers liked the property well enough—until they arrived for the inspection. The neighbors were home at that point, and the prospective buyers heard more than they liked coming from the other unit.

“The insulation between the floors was terrible. And the minute they were there and they heard that, they’re just like, ‘There’s no way,’” said Laricy, who has 17 years of experience with an average price point of $409,000. “They literally didn’t finish the inspection. … [They said,] ‘We’re gonna cut it short. We’re gonna back out of this.’”

Noise is a common issue where neighbors can sour a deal, even inadvertently. But there are other situations where a neighbor is deliberately inconsiderate, or acts like he or she has a say in who buys your house.

If you feel like you can’t sell your house because of your neighbors, what are you to do? Hang in there. We’ve collected some expert advice for you to plan your next steps.

A fence showing neighbors who making it impossible to sell a house.
Source: (Alvin Engler/ Unsplash)

The high price of neighbors 

Knowing your neighbors can help homeowners create a safer, more secure environment, according to the State of the American Neighborhood survey by Nextdoor, which since 2008 has provided free private social networks for neighborhoods and communities.

Although one-third of Americans don’t know their neighbors by name, 47% of those surveyed who know their neighbors said they have no immediate plans to move. 35% had shared information with neighbors about crime and safety in the neighborhood.

That said, some neighbors make residents want to move. Real estate lawyers Ronald R. Rossi and Laurel Champion of Rossi, Hamerslough, Reischl and Chuck of San Jose and Monterey, California, recalled on their blog how one client in Cupertino lived next door to a couple who owned five large dogs, after whom they seldom cleaned.

When their client spoke to the couple about the barking and repugnant smell, the neighbor responded with profanity, turned the hose on the client’s control panel to knock out the power, threw rocks at the house, and poured gasoline around the garage, according to the blog’s recounting. The client called the police, who arrested the neighbor, but the client and his wife went to stay in a hotel.

Even without such confrontation, bad neighbor behavior—such as a poorly maintained exterior, unkempt yard, odors, loud music, and annoying pets—can lower home values by more than 5% to 10%, noted the Appraisal Institute, a nationwide professional association of real estate appraisers. In appraisal terms, this is “external obsolescence,” or depreciation caused by external factors not on the property.

While this is understandably stressful, there are resources to help you deal with the situation so you can get to the closing table.

1. Be transparent about the neighbor situation with buyers

First, you’ll want to let potential buyers know what’s happening with your neighbors to avoid possible legal trouble down the line. Although every state’s laws are different, the core of most real estate disclosures is that sellers have to warn potential buyers of problems of which they’re aware. (You can check your state’s disclosure laws with HomeLight’s list of all 50 states’ individual mandated real estate disclosure forms or rules).

Some states employ a “Caveat Emptor” or “Buyer Beware” rule instead of a standard disclosure form, but this doesn’t allow you to plead ignorance, either. For instance, Alabama has a “Caveat Emptor” rule, which doesn’t apply if the seller or real estate agent knows about something that would impact a buyer’s “health or safety.” A buyer could argue a health risk because of a heap of dog feces in the yard next door, or a safety risk from a belligerent neighbor, as the California homeowner faced.

California has a detailed real estate disclosure form where the seller must check off structural defects or mechanical malfunctions on the property, as well as any lawsuits, deed restrictions, and “neighborhood noise problems or other nuisances,” broad language that covers the scenario described above.

In that situation, lawyers Ross and Champion noted that they had to prepare detailed documentation about their client’s dispute with the neighbor to give prospective buyers in order to be more than forthright. Otherwise, after the buyer moved in, another neighbor could fill them in on what happened previously, opening the seller to a lawsuit for “failing to make complete and adequate disclosures.”

The residential real property disclosure form in Illinois does not mention issues with neighbors, noise, or nuisances. It focuses on material defects, flooding, termite infestations, and “unsafe concentrations” of radon, lead paint and asbestos. Sellers also have to note whether they’re aware of any boundary or lot line disputes, and whether their property had been used for the manufacture of methamphetamine.

Even so, Laricy said he mentions the design and construction of multi-unit buildings, just to prepare buyers who might not be used to such close quarters.

“It’s something I bring up to my clients: ‘OK, just so you know, in a building like this, you always hear people,’” he said.

Neighbors making noise so homeowners can't sell the house.
Source: (Allen Taylor/ Unsplash)

2. Try to talk to the neighbors, even if it’s a last ditch effort

If you’re in a situation similar to the California homeowner, “talking” to your neighbor may involve using a lawyer, or contacting law enforcement for your own safety. (More on that in a moment.) However, if there’s just annoyance between you, start small: speak with the neighbor, write a note, or ask your real estate agent to ask for their cooperation.

Because noise crops up often for Laricy’s sellers and buyers, he and his clients have asked neighbors with dogs or small children who can’t help but stomp and play to take the dog for a walk, wear socks instead of shoes, or step out for a bit during showings. He said he’ll still give prospective buyers a heads-up, such as: “The insulation’s really bad, and the neighbor’s got a dog that’s super loud.”

Whether your neighbor is loud, invasive, terrible at lawn care, or just a nightmare in general, consult HomeLight’s guide to dealing with the different kinds of bad neighbors before taking more extreme measures.

3. Go to your HOA if you have one

If there’s truly bad blood between you and your problematic neighbor, it’s time to bring in outside help. If you live in a community with a condominium owners’ association (COA) or homeowners’ association (HOA), tell them what’s happening.

These associations try to stay out of disputes where, say, one neighbor blows leaves into another’s yard. But a community’s Covenants, Conditions, Restrictions (CCRs) typically have a clause that says homeowners have a right to “quiet enjoyment” of their homes, according to All Property Management, a nationwide company that connects property owners with professional property managers. This includes any type of abuse, verbal or physical harassment, intimidation or aggression.

That means that when one neighbor is harassing another in a way that violates regulations from the Department of Housing and Urban Development (HUD) or the Fair Housing Act, the COA or HOA becomes liable for legal action as well, All Property Management says.

Whether your HOA or COA decides to investigate on its own, involve a mediator, consult its legal counsel, send a cease and desist notice, or pursue other action depends on your community and the CCRs. However, having evidence of the behavior helps, these property experts say.

Provide any documentation of behavior you’ve reported to your municipality. Your real estate agent also can help by documenting any instances where the neighbor’s behavior has interfered with a showing or a sale.

One HOA and its attorney intervened for a Utah user in Reddit’s Legal Advice forum, which has 960,000 members. The user posted earlier this year that they had to move from Ohio to Utah for work but had trouble selling their Ohio home because of a neighbor’s “sabotaging” behavior, including parking his truck in such a way that potential buyers could not park near the property and revving his motorcycle engine during showings. The HOA notified the neighbor this was unacceptable.

A computer used to help sell a house with bad neighbors.
Source: (Stefen Tan/ Unsplash)

4. Raise your concerns to the city or county

This may occur in tandem with the previous step. In essence, a homeowner can pursue either trespass or nuisance actions against a “sabotaging neighbor,” even if you’re not selling your home, says the Washington, D.C., personal injury law firm Simeone Miller, LLP, which handles premises liability cases.

Trespass is when someone physically enters your property, either directly or indirectly (through an object such as breaking a fence or window). Nuisance is when a neighbor unreasonably interferes with your property’s usage through unsightly debris, loud music, and so on.

Check your municipality’s code enforcement and noise statutes, and report any possible violations to the police or appropriate authorities. Simeone Miller recommends starting with a conversation, if possible; then a personal letter; then contacting the authorities.

5. Get a lawyer if absolutely necessary

If you feel that your personal safety is threatened, you may wish to involve law enforcement, a lawyer, or both in your situation earlier. Once a lawyer is involved, you do have another recourse beyond the lawyer providing communication.

Jurisdictions generally have causes of action for “intentional interference with contractual relations,” or something similar. This allows you to bring a claim against someone who “wrongfully” interferes with your contract or business relationship with another party, which would include the sale of your home.

As you weigh your course of action, be sure to keep your real estate agent informed—and ask if he or she has any suggestions as well. Agents encounter so many different personalities through the course of real estate transactions that they may be able to help open a dialogue with your neighbor, if not hammer out a satisfactory solution.

Header Image Source: (F. Muhammad/ Pixabay)

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