If you knew of the encroachment and failed to disclose it, then you committed fraud and you are liable for their costs or losses due to this.If you did disclose the encroachment or were unaware of it (e.g. did not know where the boundary was; though the fence was on the neighbor's land; etc.) you are not liable for responsible: only a failure to disclose a known issue makes you liable. Of course, to get the money, even if you should, if they won't voluntarily pay it, you'd have to sue; you could spend more (in time and/or money) suing than you hope to get back (i.e. more than $2,000), so you need to make a cost-benefit decision as to what to do.