Adverse Possession: Obtaining Property Ownership Through Squatters Rights
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Despite the modern legal practice of perfect ownership in property through written contracts, “adverse possession” is still a firmly rooted, if archaic, common law method for acquiring land.
Consider the following example: You inherit a house from your uncle. Adjacent to his house is a partial lot. Growing up, you recall your uncle using this lot on a regular basis. In fact, you and the rest of your family assumed your uncle owned the lot. After his estate is probated, you decide to move into the house and continue using the lot as an extension of your property. Using inheritance money, you decide to put up a nice fence around and a concrete patio on the lot. Several years pass before your neighbor stops by to tell you they had their property surveyed and learned they have legal ownership of the lot.
Do they really? Because of your open and continuous use of the property, your equitable right of possession may actually have trumped their contractual right to possession. This equitable right is commonly referred to as “adverse possession.”
The term "adverse possession,” sometimes referred to as "squatter's rights," refers to a situation where title to real property is acquired without compensation by virtue of open and continuous use of the property in a manner conflicting with the true owner's rights for a specified length of time. In the example above, though you didn’t pay anything extra for the partial lot, your use of the property conflicted with your neighbor’s use of the property for several years. You adversely possessed his property.
Adverse possession evolved as a cure to potential or actual defects in real estate title by putting a statute of limitations on possible litigation over these types of title disputes. Without the doctrine of adverse possession, a landowner could not be secure in the title to his/her land. Long-lost heirs of any former owner or lien holder could come forward with a legal claim to the property. Adverse possession places a statute of limitations on this kind of action, providing property owners more security in their ownership interest. Essentially, if a true owner does nothing to assert their ownership interest in a particular piece of property within a certain period of time, they forfeit the right to do so later.
Adverse possession is based on the doctrine of "laches." Defined as neglecting to do what should or could have been done to assert a claim or right for an unreasonable and unjustified time causing disadvantage to another, laches is a concept that has existed in the common law for hundreds of years. Laches prevents unreasonable results if a person fails to enforce his/her property rights within the proper time. In the example above, your neighbor watched you openly use and improve the partial lot for years without notifying you of their ownership interest. Because they did nothing to correct your misunderstanding, they are barred from profiting from your improvements on the lot. Your neighbor’s failure to timely defend their property rights can result in a forfeiture of their interest.
Though adverse possession law varies slightly from state to state, there are five basic common law requirements you must satisfy to make a claim of adverse possession:
1. Actual Possession- Having actual, physical control over the property. This means acting as though you are the owner, and using the property in the manner in which an owner would have used it.
2. Open and Notorious – The use and possession of the land must be so visible and apparent that it gives notice to the legal owner that someone may make claim to it. In other words, it must be of such character that it would give notice to a reasonable person. This requirement can be met by installing fencing, opening or closing gates to the property, posting signs, growing crops, erecting buildings, or housing animals. In the partial lot example, you openly used and developed the lot in such a way that a reasonable neighbor definitely should have noticed. Secretly occupying another's land does not give the occupant any legal rights.
3. Exclusive Possession- An adverse possessor cannot occupy the land jointly with the titled owner or share possession in common with the public. This does not mean that others must be excluded from the land in order to claim "exclusive" use, but an adverse possessor must have been the only person to treat the land in the manner of an owner. In the partial lot example, even though you may have invited guests over for a party in your newly remodeled patio area, you were clearly the only person “acting” like an owner of the partial lot.
4. Hostile Possession – Adverse possession must be hostile to the title owner's interest in the property. The word “hostile” in an adverse possession claim does not mean showing ill will; rather, it means that you possess the property as an owner and hold it against all other claims to the land. Accordingly, one cannot claim "adverse possession" if one is engaged in the permissive use of somebody else's land. If your neighbor permitted you to use the partial lot for birthday parties or social gatherings, but still otherwise asserted their interest, your possession would be considered “permissive” instead of “hostile.”
5. Continuous and Uninterrupted - All elements of adverse possession must be met at all times for a set period of time. This time limit differs from state-to-state. It may be for as little as five years or as much as 20 or more. Occasional activity combined with long gaps of inactivity is insufficient. While the time of possession must be continuous and uninterrupted, you may still be able to claim adverse possession through the principle of "tacking," meaning a former owner's years of adverse possession can be "tacked" onto the present owner's years of possession to comprise a cumulative period of adverse possession. Using the same uncle/inheritance example, you would be allowed to “tack” the time that your uncle used and possessed the partial lot onto your period of adverse possession to perfect an equitable interest in the partial lot.
Even though “adverse possession” is based on common law, most states have now enacted statutes governing adverse possession claims. As a result, one or more of the following conditions may also apply in order to your claim:
- Color of Title - A claim to title by adverse possession often must be made under “color of title”. This means that a claim of a fact that appears to support a person’s claim to title is in some way defective. Continuing the uncle example from above, a claim made under color of title would include your neighbor’s deed not being properly executed, and/or your separate deed also granting you title to the same partial lot.
- Payment of Real Estate Taxes
- Good faith
- Improvement, cultivation, or enclosure
Most property can be subject to a claim of adverse possession. However, it should be noted that public land is generally exempt from adverse possession. The rules for adverse possession vary from state to state so before you give your neighbor a “patio” windfall, contact a local property or real estate attorney to see how the rules of adverse possession apply to your situation.