Some real estate theft won't land you in jail

By Bob Bruss

July 15, 2005

Quite some time ago, I received a very nasty letter from a lady who moved into a vacant house near Fresno, Calif. She reported she lived there almost three years before being evicted by the mortgage lender foreclosing on the property. "Why don't you warn readers about the risks of 'squatter's rights' and spending money to fix up vacant property?" she chastised me.

Unfortunately, that woman was uninformed about the state law of adverse possession (formerly called "squatter's rights"). Every state has some version of this common law doctrine, which encourages use and payment of property taxes on vacant property.

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Most states adopted English common law in the 1800s and early 1900s (except Louisiana, which chose the French Napoleonic Code). Common law includes the law of adverse possession, which allows a "squatter" to claim title after occupying a property and paying the property taxes for a specified number of years.

The details of each state's adverse possession law are different. But the principle is the same. An adverse possessor or squatter who occupies a property for the required number of years and pays the property taxes can eventually acquire fee-simple title. However, the squatter must pay any secured obligations, such as a mortgage, recorded liens and property taxes, or risk losing the property by the lender's foreclosure.

Closely related are the state rules for acquiring a prescriptive easement to use part of a property. Again, state laws reveal the details, but payment of property tax is not required to acquire a prescriptive easement.

1. HOW TO STEAL A PROPERTY WITHOUT GOING TO JAIL. Do you know of a property that is vacant and the property taxes are unpaid? It might be a candidate for legal theft by adverse possession.

For example, that lady who occupied the vacant house in Fresno for three years could have become entitled to title by adverse possession if she had paid the mortgage payments and the property taxes.

California has the most generous adverse possession law, requiring "open, notorious, continuous and hostile occupancy" plus payment of the property taxes for only five years.

Texas and several other states have much tougher laws, requiring adverse possession for 30 years before becoming entitled to receive title. Needless to say, not many Texans obtain title by adverse possession. Other state statutes are in between these limits.

The nation's leading adverse possession court decision is Stevens v. Tobin (251 Cal.Rptr. 587) from the California Supreme Court. Thomas W. Stevens brought his quiet title lawsuit against the legal owner. He argued he adversely possessed for 15 years the San Francisco apartment building at 1899 Oak St. in the famous Haight-Ashbury District. He proved open, notorious, hostile, exclusive and continuous possession. However, he was unable to prove he paid the property taxes. Therefore, the adverse possessor lost and did not gain title to the valuable property.

2. HOW TO STEAL PART OF A PROPERTY WITH A PRESCRIPTIVE EASEMENT. If you want to use just a portion of a property, without obtaining title to the entire parcel by adverse possession for the required number of years in the state where the property is located, your alternative is obtaining a prescriptive easement.

The legal requirements are similar to adverse possession. To acquire permanent use of part of another's real estate, you must meet the same tests of "open, notorious (that means obvious), continuous and hostile use (without permission)" for the required number of years.

However, use need not be exclusive. Use can be shared with the title holder. Nor is there any requirement for payment of property taxes for the pr