What Is Adverse Possession?

adverse possession is a legal ruling that transfers property ownership based on continuous occupancy over an extended period of time. While the definition varies from state to state, generally, a person may acquire the legal rights to a property simply by using it.  

Adverse possession is sometimes known casually as “squatters rights” or homesteading, which might bring a sense of deception to mind. But in practice, adverse possession is much less sinister. 

Most adverse possession cases involve disputes over things like fence placement or driveway pourings. Neighbors may inadvertently take possession of the land next door by working from a faulty survey or property description. Years later—perhaps when it comes time to sell—the discrepancy is uncovered and legal possession may need to be determined.

Requirements for Adverse Possession 

As mentioned, individual state law proscribes the elements of adverse possession. However, the following requirements remain constant in some form or another.

  • Actual and continuous: The adverse possessor must maintain a physical presence on the property for a set period of time. Some states require proof of maintenance or even paid taxes. 
  • Exclusive: The person claiming adverse possession must be the sole user of the property. Sharing the area with strangers or the owners negates this point. 
  • Hostile: This doesn’t refer to violence. Instead, think of trespassing, whether intentionally or not. Further stipulations vary by state. 
  • Open and notorious: The possession is obvious to anyone who would choose to observe it. 

Though all of these requirements are important, the first point—the actual and continuous requirement—is key and not easily satisfied. Some states require five to seven years of continuous possession with a document, deed, or paid tax bill as proof. On the higher end, other states institute a statutory period of 20 years or more. 

What Does Adverse Possession Mean for Real Estate Investors?

Property owners must be vigilant about their boundaries. In most urban and suburban settings, this task is fairly easy and somewhat obvious. Before a neighbor puts up a shed near your lot line, have a friendly chat about double-checking your titles before construction. That way, you can avoid potential issues in the future.

In rural areas where properties are large and more obscurely marked, maintaining boundaries may take a little more effort. A farmer may want to travel the property lines once a year to ensure the neighbor’s seeds or animals haven’t wandered. Otherwise, over time, neighboring farms may occupy the land in slivers and gain ownership through adverse possession. 

Investors looking to purchase property should insist upon a survey and title search in order to clearly define lot lines. If there’s a discrepancy—like a shed encroaching on your property—an agreement will need to be made before the purchase. title insurance companies will not insure a title with property encroachments.

Sometimes neighbors can work out a compromise or even a sale of the property portion in question. Together, they can change the legal title with the help of a real estate lawyer. If no agreement can be reached, a “quiet title” lawsuit is filed. Then, a judge will determine the true owner—possibly through adverse possession statutes. 

To protect possession, owners should always draw up usage documents, such as leases, easements, or even informal letters. (For example, a simple email documenting permission for someone to use a corner to grow their garden.) A rental agreement or easement makes an adverse possession claim impossible to win. No acquired title will be issued to the user, and you keep possession of your property. 

Adverse possession needs to be taken seriously, since it’s a variable legal statute in all states. But thanks to the strict requirements involved in adverse possession cases, property owners can protect themselves against adverse possession.