What Landlords Need to Know About Squatter’s Rights

In This Article

More and more landlords have been paying attention to squatter’s rights and how this situation could happen to them. While rare, there are circumstances when unauthorized occupants, known as squatters, may take up residence at your property, also known as squatting. 

If you are a landlord or property investor and find yourself in this unnerving situation, there are certain steps you need to take to protect your property without violating existing regulations surrounding squatter’s rights.

What Are Squatters Rights?

An unauthorized occupant, otherwise known as a squatter, is someone who continuously occupies or uses a property as if it were their own without legal permission from the property owner. 

Specific timelines and details vary from state to state, but if there is an absence of eviction from property owners, the right to obtain ownership of the property may apply through adverse possession laws.

If unauthorized individuals who don’t pay you any rent move into your property and you are unaware of the situation, you could find yourself in a tricky spot. Most rules and regulations surrounding squatter’s rights require landlords to treat squatters as if they were renters who failed to pay rent and serve them with an eviction notice.

According to adverse possession laws, if a certain period of time passes and you—the property owner—have not served an eviction notice and the squatters remain, whoever pays the property taxes, utilities, and other fees will legally have rights to obtain ownership of the property.

Definition of adverse possession

If a squatter has physical possession of your property, adverse possession is the process to then acquire the title to the property they occupy to be considered the property’s true owner. Simply occupying an abandoned or unused property isn’t enough to warrant an adverse possession claim; the squatter must continuously reside in or make use of the property.

For the squatter’s rights to apply, certain conditions must be met by the squatter, like occupying the property for a specific period of time (generally a number of years), open and obvious use of the property, improvements made to the property by the squatter, or no eviction attempts from the actual property owner.

What Is a Squatter?

If there has been any sort of landlord-tenant relationship or conversation between the owner or property manager and an unwanted occupant, they don’t qualify as a squatter and therefore have no squatter rights.

This includes situations like the following:

• A holdover tenant who refuses to move out at the end of their lease agreement. Holdover tenants are legally allowed to remain in a rental property if the property owner or landlord takes no action to evict.
• A holdover house guest who was at one point permitted to stay at a property by either the current tenant or landlord, who then refused to leave. They might have seriously overstayed their welcome, but they do not have the right to claim the property.
• Someone converting a commercial property into a living space or other misuse or property violation. They may be in breach of contract but do not have a claim to ownership.
• A criminal trespasser would not be considered a squatter, though this can be a gray area, as the property owner must prove that the trespasser was in the property without consent (may require evidence of forced entry or posted no trespassing signs).

Related: I’ll Never Evict a Tenant—Here’s Why

Examples of squatting

There are a number of complicated ways a squatter could begin to occupy your property. Generally speaking, a squatter is anyone who has taken up residence or occupies a property without permission from the property owner. 

Here are some examples of squatting scenarios:

• Your neighbors build a new fence that crosses onto your property line by 5 feet or so. Whether or not they were aware of the intrusion, your neighbors are now continuously using this piece of your property. If enough time passes according to your state’s adverse possession laws, the neighbors may be able to claim ownership of this piece of property.
• Your rental property was the victim of a rental scam and the tenants currently occupying your property did not work with you directly. Many rental scammers take advantage of vacant properties and create fake lease agreements, putting the scammed tenants in an unfortunate situation. If they refuse to leave the property, it’s your responsibility as the owner to resolve the situation.

Why Do Squatters Have Rights?

Ultimately, squatter’s rights are meant to protect tenants from unexpectedly losing their homes, whether they have a right to be living on the property. The eviction process gives squatters time to either prove they have a right to live at the property or find a new place to live. Evicting squatters may be time-consuming and frustrating to landlords, but it provides order in a complicated situation so justice can be carried out without someone taking the law into their own hands. 

Squatter’s rights have also been used throughout American history for centuries as a way to let unused property not go to waste. 

For example, the 1862 Homestead Act gave settlers the right to develop and build upon unclaimed land to incentivize people to move west. Eventually, these settlers were given ownership rights to the land, since they had developed the area into their own homes.  

Squatting vs. Trespassing

At first glance, squatting may sound a lot like trespassing. However, there are a few important distinctions between the two. 

First, a squatter has typically lived at the vacant property for at least 30 days or longer, depending on your local laws. If the person has also opened up a utility account or been paying taxes on the property, this strengthens the case that they are squatters, since they are “open and notorious” in their occupancy of the property. This means the squatters aren’t trying to hide their presence at the property. 

In contrast, trespassers typically break into the property illegally and haven’t made the property into their home.  

By law, squatters must be dealt with differently than trespassers. Because of squatter’s rights, landlords must go through eviction proceedings to remove squatters from the property. The police won’t get involved since the person has shown they have been living on the property for a while. If the person is considered a trespasser, landlords can call the police to remove the person from the property immediately. 

Which States Have Squatters Rights?

All states have squatter’s rights, as well as protection for property owners from adverse possession. The statutory period for when these laws are enforced and the qualifications squatters must meet to gain ownership vary from state to state.

Here are a few examples of how squatters rights work in the four most populated U.S. states: 

• California: Squatters gain possession of the property if they pay property taxes for five years. 

• Texas: The law in Texas states that squatters need to live on a property for three years or five years and prove property taxes were paid and show the property deed to claim the property. Or, squatters must live there for 10 years and no documentation is required.

• Florida: Squatters in Florida gain possession of the property if they pay taxes for seven years.

• New York: For the majority of the state, squatters must live 10 years on a property openly and illegally before claiming legal ownership of the property. Note that New York City has its own rules, where squatter’s rights can be claimed 30 days after a lease has ended.

Check the state laws where your property is located to understand how you can protect yourself from adverse possession. 

How to Evict a Squatter

Whatever way squatters make their way into or onto your property, it’s important to closely follow your state’s eviction laws and take immediate action to protect your real estate investment and keep it in your possession. In some instances, you may need to find creative ways to get rid of squatters.

1. Figure out if you’re dealing with a squatter or a trespasser

If you discover unauthorized tenants at your property, the first step is to determine how long they’ve had continuous possession of the property. 

If they’ve been there for a short period of time, you have no trespassing signs posted, or there are indications of forced entry (broken window, etc.), you are likely dealing with a criminal breaking-and-entering situation and can simply call law enforcement. But if none of these situations are present, you may have a squatter.

2. Start the eviction process as soon as possible

Of course, the first thing you should do is inform the squatter that they do not have your permission to occupy the property and ask them to leave. If the squatter refuses, some landlords have had success offering moving incentives (usually cash) to entice tenants to leave the property.

If you’re dealing with true squatters, the most important thing you can do is start the eviction process as soon as possible to avoid any issues with adverse possession laws or squatter’s rights. Evictions can be costly and time-consuming, so be sure to take all the appropriate steps and follow all applicable guidelines.

3. Involve law enforcement when necessary

Involving law enforcement in a true squatter situation can be difficult, as the authorities will want to avoid any false arrests. The burden of proof does fall on you as the property owner in most cases. If someone does refuse to leave your property, calling the police may be beneficial to establish documentation that you’ve discovered unauthorized tenants and asked them to vacate.

Ways to Prevent Squatters

The best way to avoid unauthorized occupants and many other property issues is to visit your property frequently. If you are a long-distance landlord or own many properties, consider hiring a property management company to check in on a regular basis on your behalf.

Here are some other tips to prevent squatters and adverse possession:

• Be sure to screen for qualified tenants and include clear language surrounding house guests and subleasing in your lease agreement.
• Conduct regular property inspections, especially upon tenant move-out.
• If the property will be unoccupied for a period of time, consider installing security systems or motion sensor lighting.
• Keep an eye on rental listing websites to catch any scams that may be targeting your property.

Have you encountered squatters in your property? How did you handle it? Have you heard any nightmare squatting stories from other owners?

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.