Adverse Possession and How It Works
Adverse possession is a legal doctrine studied primarily by first year law school students and forgotten as soon as exams are over. The otherwise obscure property law, also known as "squatter's rights," made big news in 2011 when a Texas man claimed to acquire a $340,000 home for just the $16 fee to file an affidavit of adverse possession at the county courthouse. Ken Robinson subsequently created a website, published an eBook, and lectured a class of law students at SMU before being forced to move out of the home in February 2012.
So what is adverse possession and can it really be used to take ownership of a pricey suburban home?
The Law of Adverse Possession
The theory behind adverse possession is simple: If someone occupies land they don't own without the owner's permission, the true owner must take action to eject the trespasser within a certain period of time (as prescribed by the applicable state statute of limitations). If the true owner doesn't act in time, the adverse possessor can acquire title to the land and become the legal owner.
In order to prevail, the adverse possessor must show these five essential elements:
- That he or she is in actual possession of the land and uses the land as the true owner of similar property would.
- That the possession is in exclusion to all others and not shared with the true owner or the general public.
- That the adverse possession is open and visible for all to see so the true owner would be aware that someone else was staking claim to the property.
- That the adverse possessor has a claim to the property that is hostile to or incompatible with the owner's claim.
- That the adverse possession has been continuous and uninterrupted throughout the statute of limitations period.
The detailed requirements vary from state to state. The required time of possession may be as short as five years in one state to as long as 20 years in another. Some states require the adverse possessor to pay property taxes or make improvements on the land during this time; in other states these actions shorten the required time of possession.
Some states require the adverse possessor to have a good faith belief that he or she holds title to the property; some states even require "color of title," some form of document that purports to convey title to the adverse possessor but is invalid for some reason. Other states require the adverse possessor to be aware that he or she is trespassing. In some states, the adverse possessor's state of mind is irrelevant and all that matters is that the land is being occupied without the true owner's permission.
An Instructive Case
While the statute of limitations period is set by state law, the doctrine's requirements are defined by court decisions written by judges. To illustrate how adverse possession works, we'll look at a court case that gave many law students their first introduction to the concept.
Belotti v. Bickhardt, decided by the New York Court of Appeals in 1920, involved the owners of adjacent lots in the Bronx. The owner of Lot J constructed a saloon and roadhouse on the property in 1892 but, due to a faulty map, the building encroached by several feet onto Lot K next door, which was owned by Belotti's mother. In 1906, Bickhardt bought Lot J from the original owner's heirs, expanded the building and used it as a hotel ever since.
In 1914, Belotti brought suit against Bickhardt to remove the encroaching building from the lot he had inherited from his mother. Belotti met with success at the trial court level, but Bickhardt appealed. The New York Court of Appeals reversed the original ruling, finding Bickhardt met the requirements for adverse possession. Bickhardt had not possessed the disputed property for the 20 years required under the New York statute of limitations, but the court found the prior owners' occupation of the property tacked on to his to create an unbroken chain of adverse possession since 1892. Bickhardt was now the rightful owner under the law.
The Purpose of Adverse Possession
While some may view adverse possession as acquiring title by theft, the doctrine serves several important purposes.
First, the law presumes that someone who possesses land does so under title. Title may be difficult to prove because deeds were lost and not recorded or land title records are deficient. The doctrine of adverse possession provides protection against unreliable documents and a means to correct long-ago errors in conveyancing. The doctrine also requires property disputes to be litigated within a reasonable period of time while witnesses' memories are still fresh and evidence is more reliable.
Adverse possession encourages productive use of land by rewarding those who use the land for farming, housing or other uses while penalizing those who let it sit vacant. Finally, it protects the expectations of individuals who have used property for years without objection from anyone. It often comes up in the context of a boundary dispute where a fence was built in the wrong place and no one questioned the encroachment for years.
The Texas Adverse Possession Case
Ken Robinson gained notoriety during the summer of 2011 when he moved into a vacant house in the Dallas suburb of Flower Mound and claimed it as his own based on payment of a $16 filing fee.
Robinson, a former marine and self-described real estate investor, had discovered the home while scouting the area for potential investment opportunities. The yard was unkempt and the house appeared to have been abandoned. Initially thinking the home would be a good candidate for a short sale or tax lien sale, Robinson could not find an owner or mortgage holder with whom to negotiate and there was no record of a foreclosure anywhere to be found. That's when he decided to acquire the house under the doctrine of adverse possession. He filed an "affidavit of adverse possession" with the county, had the locks changed, and moved in.
Although Robinson was now maintaining the home, which had fallen into a state of disrepair, his Flower Mound neighbors weren't happy. They called the police, who visited the home. When Robinson showed the officers his affidavit, they decided it wasn't a criminal matter and left.
The story hit the national media and Robinson was inundated with requests for real estate advice. He began holding seminars on how to acquire a house for next to nothing and published an eBook on the subject. He welcomed potential clients and members of the media into the home and was happy to provide tours and point out how he had cleaned things up. Then fame caught up with him.
As it turned out, the original mortgage company had gone bankrupt in 2009 and the mortgage was now held by Bank of America, which had been too swamped with other foreclosures to take action on the Flower Mound house. But faced with a blossoming adverse possession cottage industry and others seeking to replicate Robinson's seeming success, it and other lien holders began cracking down. On February 6, 2012, a Texas judge ordered Robinson to vacate the house within a week. He left without protest.
Why Robinson's Scheme Didn't Work
Did Robinson really believe he'd acquire title to the house, or was he simply biding his time in swanky digs while cashing in on all the publicity?
Under Texas law, Robinson had to stay in the house for five years, all the while paying property taxes and homeowners association fees, to acquire title by adverse possession. At any point during those five years he would be subject to eviction by the true owner, which ultimately is what happened after Bank of America caught wind of his scheme. What about that $16 affidavit of adverse possession he filed? It simply put the world on notice of his claim and provided a starting date for the five years to run; it did not convey title.
The lesson in Robinson's story goes back to the purposes for which the doctrine of adverse possession was developed. It was meant as a means to resolve bona fide disputes over property resulting from historically pervasive problems in real estate like mistaken and inadequate surveys, deficient land titles, or missing or defective deeds. Adverse possession was never intended to reward willful trespassers and squatters. As Ken Robinson learned, it's not a good business model for real estate investors.
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.