Legal Question in Real Estate Law in California

Yes, it's a trespass and you can be made to move it. There is some case law holding that if the neighbor knew at the time you were building the fence that it was on his property and silently stood by and let you build, you might have a right to some compensation, but I have not studied those cases recently, and anyway the neighbor probably didn't really know until he got the idea to build and began making inquiries and measurements.

Your neighbor may have statute of limitations problems if he sues you, but I would suggest you work it out, without litigation.

In 1988, the Second District Court of Appeal held that �The statute of limitations for trespass and injunctive relief is three years.� (Field-Escandon v. DeMann (2nd Dist. 1988) 204 Cal.App.3d 228, 233.) The court also held that the statute commences running when the encroachment is created, not when it is discovered. �When a trespass is of a permanent nature, the cause of action accrues when the trespass is first committed.�

The three (3) year statute of limitations comes from Code of Civil Procedure section 338 subd. (b). In analyzing this statute, courts have noted that the legislature did not include a provision for discovery of the trespass, as they did in the remaining subsections of the statute. "The Legislature's omission of a like provision with respect to the cause of action of subdivision 2 cannot be said to be unintentional, nor is that which has been omitted to be written in by the judicial branch of the government. We are satisfied that where, as in this case, the location of the buildings was quite apparent, the failure of the owner of the property upon which the buildings trespassed to know that his line ran under the buildings, affords no reason for saying that the cause of action for trespass did not begin to run until he was aware that it was his property, in part, upon which the buildings stood." (Castelletto v. Bendon (2nd Dist. 1961) 193 Cal.App.2d 64, 65-66.)

Recently, the courts have made a distinction between an action for damages (money) which would be barred by the statute of limitations, and an action for an injunction (removal). In that case, the Third District Court of Appeal held that an action for an injunction should be governed by the five (5) year statute of limitations of Code of Civil Procedure sections 318 and 321. "The flaw in those cases is that an action seeking to enjoin a permanent encroachment is properly characterized as an action for the recovery of real property subject to the five-year limitation period in sections 318 and 321, rather than as an action for trespass subject to the three-year limitation period in section 338, subdivision (b)." (Harrison v. Welch (3rd Dist. 2004) 116 Cal.App.4th 1084, 1096.)

What this means is that if the encroachment started over five (5) years prior to a lawsuit, your neighbor would not be able to pursue an action for damages or for an injunction, based on an argument that he recently discovered the encroachment.