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O’Hanlon v. Heater

A-4505-97T1 (N.J. Super. App. Div. 1999) (Unpublished)

DEEDS; MERGER; AFFIDAVITS—The merger by deed doctrine is not absolute, but only creates a rebuttable presumption; consequently, representations in a contemporaneously delivered affidavit of title can be an exception to the doctrine.

The buyer of a single family dwelling sued its seller over a driveway that encroached on a neighboring lot. At the time of purchase, there were two driveways on the property. One clearly encroached on the neighboring lot. Thus, the seller had constructed a second driveway (the one at issue) which was ten feet wide. At the time of closing, there was apparently a question as to whether this driveway also encroached on the neighbor’s lot. Despite this, and despite the fact that the title insurance company refused to insure title to this driveway, the buyer did not obtain a survey of the property prior to closing. However, in addition to the deed, it obtained a survey affidavit from the seller stating, “[g]ravel drive has been relocated so as to be [completely] located on [the lot being sold] and no longer encroaches on [the neighbor’s lot].” About four years after closing, the buyer was informed by the neighbor that the driveway in question encroached on its property. The buyer requested an easement, but the neighbor refused to grant it. The driveway then became impassable when its width was decreased to five feet at the point where the neighbor installed its rock wall on the property line. A large boulder on the lot precluded widening the driveway easily. The lower court ruled against the buyer as a matter of law, holding that the doctrine of merger caused any representations by the seller to merge into the deed and no representation survived the closing. It also concluded that the survey affidavit did not guarantee a driveway of any particular width. As the lower court viewed the evidence, the buyer got what it was promised, a driveway which did not encroach on its neighbor’s property. The Appellate Division disagreed with the lower court’s analysis. As to the facts, it held that the lower court should not have granted summary judgment. With respect to the doctrine of merger, the Court pointed out that the doctrine is not absolute, but only creates a rebuttable presumption in favor of a seller when confronted with a breach of contract claim arising out of a land sale contract. The doctrine of merger holds that “in real estate transactions, all warranties and representations made in connection with the sale, unless specifically reserved to hold over after passage of title, are merged into the deed.” The court pointed to several cases that recognized circumstances rebutting the presumption. Those cases exemplified situations where the evidence revealed that the parties clearly intended for an agreement not to merge with the deed. One exception goes to collateral covenants, where there is no merger because covenants in an executory contract independent of, and collateral to, the deed given in pursuance thereof, are exceptions to the rule of merger. In its view, the collateral covenant was reflected in the survey affidavit that was executed simultaneously with the deed of closing and the buyer had testified before the lower court that, but for the survey affidavit, the closing would not have occurred. According to the Court, upon the adducing of this evidence from the buyer, the lower court should have found that it was the seller’s duty to come forward with evidence to controvert the buyer’s claims or to rest and move for judgment. Therefore, the matter was remanded to the lower court for a determination as to whether the presumption was rebutted, and if it was not rebutted, to determine whether the driveway that was conveyed could be used without requiring the buyer to traverse onto the neighbor’s property.


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