Adverse possession is a doctrine under which a person in possession of land owned by someone else may acquire valid title to it, so long as certain common law requirements are met, and the adverse possessor is in possession for a sufficient period of time, as defined by a statute of limitations. If successful in proving it, the claimant is not required to pay the owner for the land. To successfully claim land under adverse possession, the claimant – also called the disseissor – typically must demonstrate that his or her occupation of the land meets the following requirements:
– Continuous: the disseissor has been in continuous possession of the property in question.
– Hostile: the disseissor is using the property without an existing agreement or license from the landowner as with a written easement or rent agreement.
– Open and notorious: the disseissor’s possession of the property is obvious to anyone observing it.
– Actual: the disseissor is actively in possession of the property, including maintaining it and (depending on state law) paying taxation upon it.
– Exclusive: the disseissor is using the property and excluding others from using it as well.
It is sometimes called squatter’s rights, although squatter’s rights are a colloquial reference to the idea rather than a recorded law. Common examples include continuous use of a private road or driveway, or agricultural development of an unused parcel of land.
The requirements to prove it can vary widely between jurisdictions. In many states, proof of payment for the taxes on a property and a deed are essentially required for the claimant to be successful. Each state has a time period during which the landowner of record can invalidate the claim at any time. For example, if the state threshold is 20 years and the landlord paints or pays for other maintenance on the house in question in the 19th year, then the claimant will have a difficult time showing proof. That said, landowners are advised to remove the possibility of adverse possession as soon as possible by having signed agreements for any use of owned property. Because of the doctrine of adverse possession, a landowner can be secure in title to his land. This means the law may be used to reward a person who possesses the land of another for a requisite period of time.
Adverse possession is similar to homesteading in practice. In homesteading, land that has no owner of record or is government owned is granted to new owners provided they are using and improving it. If a homesteader doesn’t use the land, they can lose it. It can operate in a similar manner by freeing up land with unclear title for productive use. Of course, adverse possession can also be abused in ways homesteading cannot. If there is an informal easement between two farms where one farmer’s fence has an acre of the neighbors’ land in it, for example, the farmer using it can claim adverse possession to essentially bite off that chunk of land if there is no written easement agreement.
Possession under lease or license agreement is generally not considered as adverse possession, and tenant cannot claim an ownership right over the property. Thus, it does not fulfill the elements of adverse possession. As long as the owner has consented the stay of the tenant, it cannot claim adverse possession.
Adverse possession has been proposed as a possible solution to discourage abuses of intellectual property rights like cybersquatting, excessive copyright and patent trolls. Applying adverse possession to intellectual property as well as physical property would force the abusers to put more resources into actively using their portfolio of trademarks, patents and so on, rather than just sitting on them and waiting for the actual innovators to step in their territory.
Acquisition Loans, Asset Finance, Bridge Loans, Business Credit Lines, Construction Loans, Corporate Finance, Debt Finance, EBITDA, Equipment Finance, Equity Finance, Factoring, Hard Money Loans, International Finance, Investment Funding, Joint Venture, Mezzanine Finance, Secured Loans, Term Loans, Trade Finance, Unsecured Loans, Venture Capital.
Serving these sectors:
Accommodation, Aerospace, Agriculture, Biotechnology, Commercial Real Estate & Development, Construction, Energy, Entertainment, Health Care, Hotels, Infrastructure Development, IT/Telecommunications, Manufacturing, Mining, Natural Resources, Oil & Gas Exploration & Pipelines, Power Distribution, Power Generation, Power Plants, and Renewable Energy
THE WEB LENDER
We exist to facilitate corporate finance worldwide