This section is from the book "Real Estate Principles And Practices", by Philip A. Benson, Nelson L. North. Also available from Amazon: Real Estate Principles and Practices.
The building may stand entirely upon the proper lot and a neighbor's building may encroach. Of course the title to so much as is not encroached upon is marketable, but it may be a grave question of whether the encroachment does not affect the marketability of the lot as a whole. This is not so much a question of law as of commercial utility, and the courts so consider it. If the court find that the encroachment does not substantially lessen the value and extent of the property, it will compel a purchaser to accept it. If the encroachment does substantially lessen the value and extent of the land, the purchaser may refuse to take it, or he may take it, and be given an allowance for the land lost by the encroachment.
 
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