What You Need to Know
- The New Jersey Appellate Division has confirmed that the doctrine of relative hardship is an affirmative defense: the encroaching party bears the burden of proving that the benefit of removal to the neighbor would be "grossly less" than the cost of removal.
- For lenders, title insurers, and property owners, even minor encroachments carry removal risk, not merely damages exposure, where the encroaching party cannot substantiate the hardship of removal with credible proof
- Expert testimony is critical in valuation of real estate encroachments and can be outcome-determinative.
Introduction
The New Jersey Appellate Division recently affirmed a trial court’s order requiring the defendant to remove and relocate encroaching structures that it built on plaintiff’s adjacent oceanfront property. Susanne, LLC v. 1 Howe St. Bay Head, LLC, No. A-2223, 2026 LX 269214, at *1 (Super. Ct. App. Div. May 13, 2026). In affirming the decision, the Court confirmed that when a litigant invokes the doctrine of relative hardship in an attempt to preclude an injunction for trespass, it bears the burden of showing that the benefit conferred on it is “grossly less” than the cost incurred on the neighboring property. In so doing, the opinion offers valuable guidance to parties on addressing the doctrine of relative hardships.
The Boundary Dispute
The defendant, 1 Howe Street Bay Head (“Howe”) purchased its property in Bay Head in 2017. At the time, the southern boundary between it and Plaintiff, Susanne, LLC (“Susanne”), its neighbors to the south, was marked by railroad ties and a wooden fence. The principals of Susanne inherited from their parents who purchased it in 1963. The home was used as a vacation home and rental property for two months of the year. Howe began a construction project on its property in 2021. As part of the construction, Howe removed the ties and fence. It then built a retaining wall and other structures that encroached on Susanne’s property by 1.2 to 1.3 feet. It also constructed an access path on the property without permission. Finally, Howe built its improvements inconsistent with the approvals it received from the Borough of Bay Head.
In 2022, Susanne filed a complaint alleging trespass, seeking an order to compel Howe to remove all encroaching elements of its construction, as well as compensatory and punitive damages. Howe did not contest the encroachment but defended under the doctrine of relative hardship. The doctrine of relative hardship “calls for a balancing of the equities” and represents a compromise between the “conflicting interests of neighbors, in which many harms must be borne as incidents of communal life.” Szymczak v. Laferrara, 280 N.J. Super. 223, 229-30 (Super. Ct. App. Div. 1995). Instead of imposing a costly injunction on the encroaching party, courts will award monetary damages to plaintiffs who have suffered an injury to their property. Id. at 231. When applying the doctrine or relative hardship, courts may consider the “wanton or intentional character of a defendant's conduct, laches, and the comparative fault of the parties.” Id.
Following the completion of discovery, Susanne filed a motion for summary judgments, which was granted by the Trial Court as to trespass only. Subsequently, a two-day bench trial was conducted to determine the appropriate remedy for the plaintiff.
At trial, Susanne called an expert professional planner who opined that Howe’s improvements were not in compliance with the plans it had filed and violated local zoning setback requirements. Susanne also called an expert real estate appraiser. He testified that the combined value of the land occupied by physical and related access encroachments would be $105,800, utilizing the “before and after” method. Following the presentation of Susanne’s case, Howe moved for a directed verdict concerning punitive damages, which was granted by the court.
In its case-in-chief, Howe also called an expert real estate appraiser. He opined that the loss caused by the encroaching wall was $1 because it did not impair the use or value of the plaintiff’s property. Going further, he averred that there was no loss caused by an access easement as the land could not be developed beyond a wooden walkway to the beach. Howe also sought to call an expert contractor, who testified to the cost of removing and reconstructing the retaining wall. His expert report, however, contained little to no breakdown of the necessary costs, and the handwritten notes that he provided did not match his estimates. Susanne filed a motion to bar his testimony, which was granted by the court. Finally, Howe also sought to call a real estate developer as an expert. This testimony was barred, however, as the developer had never been proffered as an expert.
Following the conclusion of the bench trial, the court entered an order requiring Howe to remove and relocate the encroaching structures from Susanne’s property. It dismissed Susanne’s claim for compensatory damages as it was requiring Howe to remove its improvements from Susanne’s property. In coming to its decision, the court found Susanne’s appraiser expert as “reasonable and credible” and rejected Howe’s expert due to the lack of support. As such, the court stated that it was unable to conclude that removal was not the proper remedy under the doctrine of relative hardship due to the defense’s failure to provide evidence showing the cost or difficulty of removing or relocating the encroachments.
The Appellate Division Defines the Standard for the Doctrine of Relative Hardship
On appeal, Howe argued that the court should not have treated the doctrine of relative hardship as an affirmative defense that shifts the burden of proof to it but rather included it as an element to be proven by Susanne.
The Court rejected Howe’s argument summarily and affirmed the trial court, citing substantially the same reasoning. First, the Court explained that the party seeking a mandatory injunction is required to demonstrate that it has established its legal right to such relief, and that the injunction is needed to prevent a continuing irreparable injury. Here, the Court observed that Susanne was permanently deprived of the use and enjoyment of sections of its property due to Howe’s improper construction which encroached on and over its property. Moreover, as established by Susanne’s expert, the encroachment also negatively impacted the value of the property. As a result, Susanne successfully showed its legal right to the injunction, and that the injunction was needed to prevent a continuing irreparable injury.
Next, the Court addressed the relative hardship argument. The Court explained that the doctrine of relative hardship may be invoked to preclude an injunction for trespass where the benefit to the party seeking the injunction would be grossly less than the expense incurred by the neighboring property. If the expense of the injunction to the party invoking the doctrine is considerably disproportionate to the benefit enjoyed by its neighbor, then money damages are a more appropriate remedy than equitable relief. In defining the doctrine, the Court was clear that the burden for showing relative hardship was properly placed on Howe who was seeking to invoke the doctrine, and it did not provide sufficient evidence to meet that burden. The Court noted that Howe failed to show any evidence concerning the cost of removing and relocating the encroaching elements of its construction and failed to provide convincing evidence that an easement valued at $1 was an appropriate remedy for the encroachment.
Takeaways
This case has two important takeaways. First, it leaves no doubt that the doctrine of relative hardship is an affirmative defense, and the party invoking has the burden of proof. Second, it underlines the importance of vetting and subsequently presenting strong expert witnesses. The presentation of expert witnesses who lack a solid foundation for their testimonies will do irreparable harm to a party’s argument and overall case.
This blog was authored by Michael O’Donnell and Summer Associate Aidan Grigorian. For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com.
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