What is Adverse Possession? How can I obtain title to real estate?
What is Adverse Possession? How can I obtain title to real estate?
Real Estate Property For Rent
In a nutshell adverse possession is a process where a person or an investor can obtain the ownership or title of real property from another person because the owner has abandoned the property. This is done by simply taking possession of that property in the manner prescribed by state law.
In doing so, you can, literally acquire ownership or title of the real property for just paying the back delinquent real estate taxes and the cost to file a quiet title lawsuit establishing that you obtained title to the property through adverse possession. In other words, you can take title of valuable property for a incredible discount.
The Law of Adverse Possession
The laws governing adverse possession is local state (or, in Canada, territorial law); consequently an Abandoned property investor must look into the specific laws of a specific state or Canadian territory where the real property is located. Since the laws are different dramatically from jurisdiction to jurisdiction and can often be confusing, anyone wishing to take title to real property through adverse possession should contact a knowledgeable attorney before attempting to do so.
In order for you to begin understanding the requirements of Adverse Possession let’s look at a specific example. Below is a closer look at th California Adverse Possession law. We will use this law to identify and explain some of the more common terms used in Adverse Possession.
California Adverse Possession Law
Briefly, California state law states that Real Estate investors wanting to obtain title to another person’s real property through adverse possession MUST satisfy all the following Requirements:
1.That the Abandoned property investor’s possession was held under either (1) a claim of right or (2) under color of title:
2.That the Abandoned property investor’s possession was actual, open and notorious;
3.That the Abandoned property investor’s possession was hostile, adverse an exclusive;
4.That the Abandoned property investor’s possession was continuous and uninterrupted for a period of five years;
5.That the Abandoned property investor paid th real property taxes during that five-year period.
Possession must be held under either (1) a claim of right or (2) under color of title.
The California statutes governing adverse possession and as well as the statutes of most other states make a distinction between claiming adverse possession based upon a “claim of title founded upon a written instrument or judgment or decree” (often referred to as a claim under color title) and claiming adverse possession based upon “a claim of title exclusive of any other right, but not founded upon a written instrument, judgement, or decree” (often referred to as a claim as either a claim of right, see California Code of civil procedures Section 322 and 323. As to such claim under claim o right, see Code of Civil Procedures Section 324 and 325.
Basically a claim of adverse possession based upon color color of title is one where the claimant(Abandoned Property Investor) took in good faith possession under a deed (or some other written instrument) or judicial decree that appeared to transfer good title, but was defective. For example, a tax sale investor might take adverse possession through color of title for real estate bought at a California county tax-defaulted sale where the sale was conducted improperly and, consequently, the deed was void.
“Claim of Right” or “Claim of Title”
Abandoned property investors attempting to take title to real estate through the doctrine of adverse possession are generally more interested in taking such title through “claim of right” or “claim of title”. Under this doctrine, an investor merely needs to take actual possession of the property and hold that possession as required by appropriate jurisdictional law.
As might be expected, the requirements to establish adverse possession under a claim of right are (under California law and under the law of most all other states) are more strenuous than those associated with claiming under color of title.
In order to be accurate as the specific requirements for a claim of right refer to the specific state statutes. Again, to be safe consult with a knowledgeable attorney in the county where the property is located.
Possession must be actual
As will be seen below, an abandoned property investor claiming possession under the doctrine of adverse possession does not have to personally occupy or live on the real estate to be in actual possession of the property. However, actually living on the real estate is probably the strongest and clearest evidence that possession is actual.
Possession by tenant as actual possession
Real property can be occupied, lived on, and actually possessed by a tenant under a tenancy agreement. Take, for instance, if you look at the California appellate case of Traeger v. Friedman (1947) 79 CA 2d 151. In that case, the adverse possession claimant took possession of a apartment building through tenants and, then, managed and rented for five years. She evn paid the real property taxes out of the rent. The California court held that she had met the actual possession requirement needed to perfect title under adverce possession.
Possession is deemed actual if lands is “protected by a substantial enclosure”, “usually cultivated or improved”
If the adverse possession is claimed based on a claim of right, then California Code of Civil Procedure Sections 324 and 325 apply.
A abandoned property investor’s possession is deemed to be in actual, open and notorious possession of specific real property under a claim of right when that person has either
1.”protected” that property “by a substantial inclosure” OR
2.That person has “usually cultivated” OR
3.Has “improved” tht property.
If the real property being taken through adverse possession is a lot and acreage and cannot be actually possessed (i.e., lived on) then that property must be either “protected…by a substantial inclosure”, “usually cultivated”, or “usually improved”.
If the property is protected by a substantial inclosure, then the inclosure must be “substantial” enough to give the true owner notice of the investor’s Claim of adverse possession during the entire prescriptive period. Older Cases hold that the inclosure must be substantial enough and remain so throughout the prescriptive period of five years and protect all sides of the property claimed from intrusion by cattle or other animals. If the inclosure is so damaged as not to be able to protect all sides of the property from such intrusion, then the Abandoned property investor or claimant must promptly repair that damage inclosure or risk being found by the court to have not met this requirement.
Meeting ANY one of the three alternative, meets the actual possession requirements for adverse possession even though the Abandoned property investor or claimant does not live on the property.
Additionally, California cases have held that although “grazing” or “pasturage” is not mentioned in the Code of Civil Procedure Section 325 reproduced above, it is a method whereby an investor can take actual possession.
Possession Must Be Open And Notorious
Basically, an owner of real estate will not lose that real estate through the doctrine of adverse possession unless the manner in which the investor holds actual possession would provide reasonable notice of that possession if the owner inspected the property. Repairs and improvements made to houses such as painting the ouside of the house, keeping up the outside ground, etc. are examples of such actions.
However, an owner can lose title to real estate through adverse possession even through he or she is never actually aware of the possession because the owner never visited the real estate to discover the improvements made by the abandoned property investor.
Possession Was Hostile, Adverse And Exclusive.
Basically, if the abandoned property investor or claimant is in possession under color of title, then that possession is deemed to be adverse and hostile to the true owner and it is not necessary to offer any further proof.
However if the Abandoned property investor or claimant is in possession under claim of title, then the claimant must prove that the possession was hostile and adverse. The word “hostile” does not mean that the possession was “overtly antagonistic” to the owner; it means simply that such possession is “inconsistent” with that of the true owner.)
It must be shown that the possession was in violation of the true owner’s property rights and that it should give rise in the owner a reason to begin an action to terminate the Abandoned property investor or claimant’s possession or use.
Possession of the property with the owner’s permission is not hostile or adverse. see California Civil Code Section 813 which provides a better legal explanation of this process.
Basically what the California Civil Code Section 813 means that the owner of the property can give permission for the use of that property by the general public or specific individuals. The statute further states that: “In the event of use by other than the general public, any such notices, to be effective, shall also be served by registered mail on the user.
The claimant’s use must also be exclusive, use of that property by the legal owner or any other person except the claimant or abandoned property investor or a tenant of the claimant or abandoned property investor holding possession on behalf of that person will probably defeat a claim of title through adverse possession.
Possession Was Continuous And Uninterrupted For Five Years.
This requirement can be found in Civil Code Section 1007 when read together with Code of Civil Procedure Sections 318, 319, 321, 322, and 325. Most specifically, Code of Civil procedure Sections 325 provides:
“provided, however, that in no case shall adverse possession be considered established under the provisions of any section or sections of this code, unless it shall be shown that the land has been occupied and claimed for the period of five years continuosly, and the party or persons, their predecessors and grantor’s, have paid all the taxes, state, county, or municipal, which have been levied and assessed upon such land.”
The requirement does not mean, however, that the investor must be physically on the land every day for five years. For instance, if actual possession of a home or other rental real estate is held by tenants on behalf of the adverse possessor or abandoned property investor, then ordinary vacancies will not disrupt the continuity of the possession.
So, if an investor were to take possession of rental property, for example, and there were normal vacancies that occur, these vacancies would not be considered a violation if the five year occupancy requirement. It also means that the investor does not have to live on the property to make this claim. That means you can claim adverse possession at multiple properties as long as the property is safe and liveable for tenants. That means a positive cash flow while waiting in the prescribed period and also without your physical stay at your property.
Claimant Paid The Real Property Taxes During That Five Year Period.
See Code of Civil Procedure Section 325 which governs this requirement
The Abandoned property investor or claimant must prove that he or she has paid all taxes that have been levied and assessed against the real property claimed during the entire five year period. A failure to pay taxes assessed for any one year will defeat a claim for adverse possession. Then the claimant must also pay any delinquent taxes outstanding for years prior to the start of the claim for adverse possession. For more details please refer to the case of Los Angeles v. Coffey (1963) 243 CA 2d 121,125.
Under the law of the state of California, if a Abandoned property investor meets all the requirements of the law of adverse possession under claim of title, then that person becomes the true legal owner of the real estate that has been abandoned. If the legal title of the real property was held by the former owner with no outstanding liens that superceeds the tax lien, then the investor will have acquired the real estate for, basically, just five or more years worth of back delinquent real property taxes or for just a small investment.
So, What Should A Abandoned Real Property Investor Look For?
The two most important principles of the law of adverse possession is that a Abandoned real property investor wants to see are the following:
1.The ability to take adverse possession under Claim of right or claim of title as opposed to color of title and
2.A relatively short prescriptive period. The period of time the Abandoned property investor must adversely possess the real property before that investor can obtain title to the real property.
You are probably asking yourself, Why?
Because in the state of California, the period or prescriptive period is five years based upon the California Code of Civil Procedure. However in some states the period can last from 10, 15 or 20 years until you get title through adverse possession.