Adverse possession is a legal term that refers to a situation in which a trespasser attempts to take over legal ownership of a property from the true owner. As a landlord, it's crucial that you are aware when there is a potential adverse possession claim on the horizon. In light of that, we have created a guide for navigating this type of situation. Keep reading to learn more.
What is adverse possession?
In real estate law, adverse possession is a statute granting legal ownership of a property to an individual who resides on or takes possession of another person's land. However, certain conditions must be met for the legal title and property rights to be transferred from the landowner to the possessor.
In real estate investing, adverse possession is often referred to as squatter's rights. Yet, even though a colloquial term may be more commonly used, it's important to note that an adverse possession claim can truly impact the legal ownership of a property. With that in mind, as a landlord, it's crucial that you understand how this statute works so that you can protect your investments.
How does adverse possession work?
Now that you understand what adverse possession is and how it can impact property rights, it's time to take a closer look at how an adverse claim works. While the exact adverse possession law will vary by state or municipality, the information below will give you a general idea of what you can expect.
Intent of possession
To start, it's a good idea to point out that adverse possession can happen intentionally or unintentionally. As a landlord, it's common to think of a nightmare scenario in which a recently evicted tenant squats in your rental property.
However, the scenario doesn't have to be that negative. In some cases, the adverse possessor might be your neighbor who owns the adjoining property to yours. They may have unknowingly built a shed or gazebo over the property line and onto your land.
In most disputed property cases, the adverse claimant can only take over the legal right to the property if they have been in continuous possession of it for a certain period of time. Again, the exact timeframe can vary according to the jurisdiction where the property is located. However, it's a good idea for landlords to make themselves aware of the common law requirements where they invest.
To take over possession of the real property, the claimant must show that they have exclusive possession of the property in question, meaning that they must exclude others from using it as well.
Notably, for the adverse possession claim to be considered a hostile takeover, there cannot be a written agreement, such as an easement or a lease, that allows the possessor to use the property.
Open and actual possession
Typically, the possessor must also exhibit open possession of the property, meaning their possession is clear to anyone who observes the situation.
In some jurisdictions, the adverse claimant must also take over actual possession of the property, which is defined by maintaining the land and, in some cases, paying the real estate taxes on the property.
How to rectify an adverse possession case
Hopefully, the information above clarifies what it takes for an adverse possession claim to hold up in court. Still, the more important step as a property owner is to figure out how to rectify an adverse possession case. To that end, we've laid out some tips below.
Familiarize yourself with the property law where you invest
In this case, the statutory period for continuous possession of the property is particularly important for an adverse claim to hold up in court. For example, suppose the statutory period in your jurisdiction is 10 years, and the adverse claimant has only been in possession for eight. In that case, they will have a very difficult time making a case for why they deserve property rights.
In light of that, you're going to want to familiarize yourself with the real estate law in the areas where you decide to invest so that you're aware of what the legal requirements are for cases like this.
Make sure you understand your deed
Understanding your deed, particularly the legal description of your property, will go a long way toward helping make you aware of when your legal right to the property is being challenged and legal action may be required.
If the case is less about a squatter's rights and more about a boundary dispute, it may be worth getting a surveyor out to see the property. The surveyor will look at the legal description of the property for you and help you determine whether your property line is being encroached upon.
Bring proof of ownership to court
Lastly, although it may sound self-explanatory, if an adverse possession case does end up in trial court, it's your responsibility as the property owner to bring proof of your ownership. Typically, the legal title and deed to the property are all that is required. However, it also doesn't hurt to bring a record of your actually maintaining possession of the property, such as your property tax bill.
The Millionacres bottom line
It can be time-consuming and costly to deal with an adverse possession claim when you're the record owner. Still, if you want to maintain your legal property rights, it's a necessary evil. This guide can help you get started on determining what you need to do to maintain the property's legal title. Though, if you have more specific questions, it's a good idea to seek legal advice from an attorney in the area where your property is located.