What is Adverse Possession in Real Estate Investing?
The concept of adverse possession dates back hundreds of years in the United States and Europe.
The basic idea is that vacant and abandoned properties could be taken over by anyone who is willing to live in the property and pay the back taxes owed to the city, county or state.
The person taking possession does not compensate the owner of the property in any way as the former owner abandoned the property.
The idea was meant so that essentially homeless families could bring properties back to livable condition.
One property, one family, one claim was the idea to get the properties back into useful and productive condition.
However, with all the foreclosure properties that have been abandoned across the country, adverse possession is sometimes legal and other times not a legal method of property acquisition.
Obviously, when a family moves in and takes possession the property owner (lender by foreclosure) feels that his property was taken without his approval by illegal squatters.
The court system views these adverse possession claims as legal requests unless challenged by the current owner.
Because of the abuse of this method of property possession, many states' statutes are being changed to no longer allow these claims.
The person making the claim has the responsibility to pay the taxes due and to physically live in the property.
Paying the back and current taxes is fairly simple, but living in the property can be difficult if it needs extensive repair.
The abusers of this property acquisition system are filing many claims as quickly as possible and getting other people to live in the properties and repair them to meet this legal standard.
What was originally designed as an opportunity to allow abandoned properties to get rehabilitated and put back into constructive use, has become a heaven for con men, trespassers and squatters.
The trend in some areas of the country is for these individuals to make multiple claims, in some cases hundreds of filings for writs of adverse possession.
The properties are then rehabbed and sold at full market value or rented to unsuspecting tenants.
The claims will cloud the title to the property and may take years to remove.
Usually the current legal owner will have to do what is called Quiet Title to remove these adverse possession claims from the chain of title for the property.
This process is called Quiet Title because the court action is designed to "quiet" any other claims against the title by having other claimants come forward to make their claims or forever be silenced.
In summary, be extremely careful if you are buying a property that has an adverse possession claim in its chain of title.
If you aren't careful you may be the owner making the Quiet Title claim and you may not win in this court action.
Always get title insurance for any property you buy to cover this type of unexpected, but devastating potential title defect.
The basic idea is that vacant and abandoned properties could be taken over by anyone who is willing to live in the property and pay the back taxes owed to the city, county or state.
The person taking possession does not compensate the owner of the property in any way as the former owner abandoned the property.
The idea was meant so that essentially homeless families could bring properties back to livable condition.
One property, one family, one claim was the idea to get the properties back into useful and productive condition.
However, with all the foreclosure properties that have been abandoned across the country, adverse possession is sometimes legal and other times not a legal method of property acquisition.
Obviously, when a family moves in and takes possession the property owner (lender by foreclosure) feels that his property was taken without his approval by illegal squatters.
The court system views these adverse possession claims as legal requests unless challenged by the current owner.
Because of the abuse of this method of property possession, many states' statutes are being changed to no longer allow these claims.
The person making the claim has the responsibility to pay the taxes due and to physically live in the property.
Paying the back and current taxes is fairly simple, but living in the property can be difficult if it needs extensive repair.
The abusers of this property acquisition system are filing many claims as quickly as possible and getting other people to live in the properties and repair them to meet this legal standard.
What was originally designed as an opportunity to allow abandoned properties to get rehabilitated and put back into constructive use, has become a heaven for con men, trespassers and squatters.
The trend in some areas of the country is for these individuals to make multiple claims, in some cases hundreds of filings for writs of adverse possession.
The properties are then rehabbed and sold at full market value or rented to unsuspecting tenants.
The claims will cloud the title to the property and may take years to remove.
Usually the current legal owner will have to do what is called Quiet Title to remove these adverse possession claims from the chain of title for the property.
This process is called Quiet Title because the court action is designed to "quiet" any other claims against the title by having other claimants come forward to make their claims or forever be silenced.
In summary, be extremely careful if you are buying a property that has an adverse possession claim in its chain of title.
If you aren't careful you may be the owner making the Quiet Title claim and you may not win in this court action.
Always get title insurance for any property you buy to cover this type of unexpected, but devastating potential title defect.