Easements and Encroachments in Colorado: What Buyers Need to Know Before Closing

By Prerna Kapoor, CLHMS | REAL Brokerage | May 27, 2026

One of the most overlooked items in a Colorado closing packet is the property survey, sometimes called an Improvement Location Certificate. It’s the document that shows where your house sits relative to your property lines, and where the utility easements run across the lot. Most buyers glance at it for thirty seconds and move on. That’s usually fine. Until it isn’t.

I had a client in Parker last year who closed on a home with a shed in the back corner of the yard. Charming little shed, perfect for storing snow shovels and bikes. About four months after closing, the gas company sent a notice that they needed to access an easement that ran directly underneath that shed. The previous owner had built it without permission. Guess who got to pay to move it.

This is what easements and encroachments look like in real life. Here’s what you should know before you sign, especially this summer when buyers are moving fast to lock in homes before fall.

What an Easement Is

An easement is a legal right for someone else, usually a utility company or a neighbor, to use a portion of your land for a specific purpose. You still own the land. You can still walk on it, mow it, and plant things on it. What you can’t do is build something permanent over it.

The most common types in Colorado:

Utility easements. The gas, electric, water, sewer, and cable companies all need access to their lines, and those lines often run along the front, back, or side of residential lots. These easements are typically 5 to 10 feet wide and show up clearly on your ILC.

Drainage easements. Common in newer subdivisions like Stepping Stone or Idyllwilde in Parker, these channel stormwater off your property to a retention pond. If you block the flow, you can flood your neighbor’s basement, which gets you in legal trouble fast.

Access easements. Less common in tract neighborhoods, but very common on larger Franktown or Elizabeth properties. These give a neighbor the right to drive across part of your land to reach their home. They’re recorded with the deed and run with the land, meaning they stay even when ownership changes.

HOA easements. Many subdivisions reserve easements for the HOA to access common areas, maintain fences, or trim trees. These are usually buried in the covenants.

What an Encroachment Is

An encroachment is when something is built where it shouldn’t be. Your neighbor’s fence is three feet over the property line and into your yard. Your shed sits on the utility easement. Your AC condenser is one foot inside the setback. The list is long.

Encroachments cause real problems when you sell, refinance, or want to build something new. Title insurance companies often refuse to insure a deal until the encroachment is resolved. Lenders sometimes hold up closing. Neighbors who have lived with the encroachment for years can suddenly decide they want it gone.

And here’s the part most people don’t realize: if an encroachment has existed long enough, the encroacher may have a legal claim to keep it through what’s called adverse possession or a prescriptive easement. Colorado’s statutory period is 18 years for adverse possession, but only 7 years if it was under color of title with taxes paid. That’s a complicated path most homeowners never want to walk down.

What to Look For Before You Close

When you get your ILC or survey at closing, here’s what I tell my clients to actually check:

Look at the dashed lines. Those are the easements. Compare them to where buildings, fences, sheds, decks, and large landscaping features are drawn. Is anything sitting on top of an easement?

Compare the survey to the legal description. If the metes and bounds in the legal description don’t match the boundary lines on the survey, something is off.

Look at where the fence is. Especially on corner lots and irregular-shaped lots, fences are often built a foot or two off the actual line. If the neighbor’s fence is on your land, you may end up paying to share or relocate it.

Read the title commitment. Schedule B-2 lists every recorded easement, restriction, and exception to your title insurance. Some of those will affect what you can build, where you can park, and what your neighbor can require of you.

Ask about access easements specifically. If the home is on acreage or has any unusual lot shape, ask the listing agent whether there are any access easements. Get it in writing.

What Happens If You Find a Problem

If the survey reveals an encroachment or an easement issue, you have a few options during your inspection period:

You can ask the seller to fix it, which usually means having them sign an encroachment agreement with the affected party or moving the encroaching item before closing.

You can ask the seller for a credit toward future resolution. That’s often the cleanest path when the encroachment is on a neighbor’s side and would require negotiation.

You can ask the title company to insure over it, which means the title insurance will cover any claim arising from that specific encroachment. Title companies don’t always agree to do this, but it’s worth asking.

You can walk away. If your contract is still inside the title objection deadline, you have room to push back. After that deadline, your options shrink fast.

The Colorado real estate contract has specific timelines for raising title objections, so this is a place where your agent and your title officer earn their keep. If you’re going through this, push for clarity early. The Colorado Real Estate Commission publishes the standard contract forms on their Division of Real Estate site, and the title objection sections are worth reading even before you have a deal under contract.

One Practical Tip

If you’re buying a home with mature landscaping, a shed, a detached garage, a hot tub deck, or any kind of fence, ask for the original survey from when the home was built and compare it to the current ILC. Things move. Owners build things without permits. Trees grow into easements. The original document is your baseline.

If you have questions about a specific property and what its survey is showing, I’m happy to take a look with you before you write an offer. It’s the kind of detail that’s easy to miss when you’re focused on the kitchen and the school district, but it’s the kind of thing that can save you a real headache later.

Prerna Kapoor | REALTOR® | Luxury Home Specialist
REAL Brokerage | 720-949-5450 | info@prernakapoor.com
CLHMS • RENE • PSA • ABR | International Sterling Society Award Winner

Prerna specializes in residential real estate across Parker, Aurora, Lone Tree, Castle Pines, Highlands Ranch, Cherry Creek, Greenwood Village, and Centennial. She speaks English, Japanese, and Hindi.