The Finance Blogger

Small claims courts are used for a variety of situations. Many disagreements are between individuals and involve a small amount of money or services.  When it involves a neighborhood dispute there are far more ramifications than who wins in the court. This post is about one such situation that arose in our area and ended up in small claims court. The claim was resolved to one parties satisfaction. Unfortunately the impact of the claim and the subsequent decision lasted for many years.

Imagine a new subdivision, young families moving into their homes . They are beginning the process of developing their homes and their yards. Obviously a high priority are things like window coverings, furniture and decorations indoors.  Families tend also to add fences around the yard. Complete some landscaping, and some people will go as far as adding a pool, trees and fountains. Usually the first priority is to add a fence. This is were discussions can get complicated with neighbors.

Discussions with Neighbors

First of all most people will have at least 3 neighbors. Some could have as many as 6 or 7 neighbors depending on the shape of the lots and how they line up with each other. You will need to negotiate with each one to come to an agreement regarding the location of the fence. Also the type of fence, the cost of the fence and who will build it. Sometimes a meeting is required to discuss these issues and come to an agreement.

Most people can agree easily on the type of fence and location. What is sometimes  difficult is who will build it and sharing of the cost to build the fence. The particular situation that developed in our area involved two people who agreed on the type of fence, the location and the cost.  What they did not agree on was who would build it and who would pay for the fence. Normally you split the cost 50-50, however one neighbor said that he would build the fence himself. While the other wanted to hire someone.

Small Claims Court – Agreement

Were this situation went bad was when one of the neighbors hired a contractor and had the fence erected while his neighbor was at work. When the second neighbor  came home, he found the fence built and the first neighbor was demanding 50% of the cost including the labor and this was the basis of the disagreement.

What to do? Neighbor number 2 said he would pay for 50% of the material and nothing for the labor since he was planning to build the fence himself as per their verbal agreement with him and all of the other neighbors. This position was based on the agreement he thought he had with his neighbor and was definitely in agreement with all of the other neighbors since they were planning to also build their own fences to save money.

This was the disagreement!

On to small claims court with the 1st neighbor asking for 50% of the labor cost. Which amounted to less than a thousand dollars! Neighbor #2 got all of his receipts together and asked two of his neighbors to join him in small claims court.

The upshot of all of this is that the judge listened to both parties, reviewed the receipts, and listened to the two witnesses that came along. Neighbor #1 did not have a chance and the court ruled in favor of neighbor number 2. He also made the first neighbor pay for all court costs in addition to paying for 100% of the labor costs.

Now the real fun begins, since the entire neighborhood was against the 1st neighbor.  He still lives in the same home. In fact they both do and they have never spoken since that day of the disagreement over the fence.  Most , if not all of the other neighbors in the area, basically ignore the one that tried to take advantage of a friendly neighbor. If they do talk to him, they are polite and that is about it.

Sometimes small claims court is the right place to go to deal with disagreements that require a judges ruling. However most cases are better settled between neighbors in a fair and friendly manner to avoid long term hostilities and unfriendly behavior.

The moral of the story is to make sure your agreements are clear, well understood and written down before you start and think twice before heading off to court!

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