A couple of points about this interesting case.  First, is if the property was acquired for consideration with a pmm.  If so, did the bank require a plot plan- which, presumably would have shown the encroachment.  Second, did the buyer have representation for this deal?   It almost sounds to me like the buyer paid cash; possibly didn't do much with the title; and that no plot plan was ordered.  If that's so, then the situation is buyer beware.

A few years ago I did title to a property where the owner had cobbled together a batch of 25 x 25' lots out of an 1893 subdivision, from different title chains- threw up a McMansion on it and lived there for a while.  When he went to sell the property I did the title and discovered that he had no title - not defective title - but no title at all to one of the 25 x 25 foot lots.  I think the dining room of the house sat on that parcel, so he was pretty much up the creek.  

The title insurance company wanted to go with adverse possession, but couldn't because the land had never been used for anything - not a fence, nor a garden, or a structure was on it from about 1949 (prior owner) up until the owner acquired.  I think, that the solution was to Register the parcels through Land Court - an expensive and lengthy process.