Legally taking property for no money:creating title by mere possession

[Scott Smith]

Adverse Possession Under Texas Law

Just because a property has a defective chain of title doesn’t mean you should rule it out right away. Adverse possession can clear title by merely occupying it for enough time. As an investment tool, you can purchase a defective chain of title from an adverse possessor and begin to possess the property as your own and do the necessary legal legwork to clear the chain.

Adverse possession looks like a legal way to steal property, and in a sense it is. The law will allow you to get good title to property without paying for it. Crazy right? Slow down your investor wheels…it’s not a tool to be used aggressively. Adverse possession is a useful tool to clear a chain of title where the property has been possessed for years but the possessor has a defective interest.

Adverse possession is grounded in the theory that property should be used, and if the rightful owner is not using the property and makes no claim to it the law has provided a means by which a possessor’s interest will be defended and make her feel confident in making good use of the land. Often times, there is a break in the chain of title, and some of the required paperwork to establish good title has been lost even though the property has been in the possession and use of the possessor for years. Adverse possession is not an aggressive strategy which investors should consider to obtain title to “abandoned” property. Texas law does not support this kind of strategy, and you will be risking possible criminal prosecution if you do so. However, you can feel confident that if you have a bonefied claim you will not be incurring that risk.

Each state’s law is slightly different in its requirements for adverse possession, but since it is a common law principal the broad strokes are generally the same. This article focuses on Texas law, but it is instructive of what situations and strategies you may encounter in your home state.

What is Adverse Possession?

The doctrine applies to all property other than that owned by the government. The statutes governing adverse possession are the Civil Practices & Remedies Code sections16.021 et seq. To have a claim for adverse possession in Texas you must occupy the property and claim an interest superior to that of the title holder of record. Additionally you must actually peaceably and continually possess it. For a more thorough explanation see Kinder Morgan N. Tex. Pipeline, L.P. v. Justiss, 202 S.W.3d 427, 438 (Tex. App.– Texarkana 2006, no pet.).

How do you get the Court to act?

You will want to file and express adverse possession claim that contains the legal description, the lot and block or metes and bounds. You may have to get a survey and thereafter file an affidavit of adverse possession with the survey attached. If you don’t have time to wait for a survey, you can file the affidavit with the property description on file with the recording office and later amend the affidavit with the survey information later.

You have to dot your “i’s” and cross your “t’s”

Adverse possession is not like horseshoes and hand grenades, you have to do it exactly by the book. You have to apply exactly with the statute, and you should be prepared to produce evidence just like you were going to trial on the facts. After your proceeding, the original owner has a period of time known as the statute of limitations to bring a claim to recapture the land known as a “trespass to try title”. If the original owner does not bring suit during that statute of limitations period, you can be confidant in your ownership of the property.

Requirements and Statute of Limitations

erse possession requires in essence that you are making an obvious visible cla787=======m that you are claiming a piece of land as your own. The law presumes that if you are making such a claim, anybody else that claimed an interest in the land would be put on notice and would attempt to evict you if you were claiming the property as yours. If you have Your possession of the property must be actual, open, notorious, exclusive, adverse, hostile, continuous, and uninterrupted for the applicable statutory period.

The record owner bears the burden of proof and has three methods of responding to an adverse possession claim. I’ve written the statutes of limitations below in plain English, but before you take any action you should research the statute appearing below including applicable case law. This research can be done at your local law library where you will have access to the resources as well as to librarians who are skilled researchers.

BELIEVED VALID CONVEYANCE

Tex. Civ. Prac. & Rem. Code § 16.024 (Three-Year Statute):

The original owner must bring action against one claiming under color of title within three years of the adverse possession claim accruing.

The possessor must have at least a deed, even if it defective. The possessor must produce conveyance or title paperwork to have a relatively brief three year statute of limitations. After the statute of limitation expires, the original owner is unable to bring suit to successfully recover the property.

Tex. Civ. Prac. & Rem. Code § 16.025 (Five-Year Statute):

TAX PAYER WITH REGISTERED DEED

The original owner must bring suit within five years from the date when the adverse possession claim accrues where the possessor (1) uses the property; (2) pays the taxes; and (3) has a registered deed. The registered deed cannot be a forged deed, i.e. from a shyster who defrauded you by “selling” you the property even though they had no claim to the property.

POSSESSION ONLY

Tex. Civ. Prac. & Rem. Code § 16.026 (Ten-Year Statute):

The original owner must bring suit within 10 years after the day the cause of action for adverse possession accrues where the possessor uses the property. The possessor need not have title instrument, but she is limited to 160 acres unless the property claimed is enclosed (i.e. a 200 acre fenced in area).

CAVEATS TO STATUTE OF LIMITATIONS

The law cuts people a break that are not in the position to defend their property. People who are in some way disabled from being able to defend their claim for reasons of being too young or insane do not have the statute of limitations counted against them until the disability resolves.

Also note that you can purchase someone else’s Limitations period by means of their conveyance to you. A deed from that person who was adversely possessing will be added to your Limitations period if there is direct legal connection between their and your interest in the property.

If you ever think someone is attempting to adversely possess your property you should attempt to evict them from the property. If they resist, a declaratory judgment action claiming trespass to try title.

The Adverse Possessor Can File A Claim To Solidify Their Chain Of Title

The Adverse Possessor must make out the elements of Adverse Possession to the satisfaction of the Court. Evidence of structures being erected and maintenance of the property as well as fencing is some evidence that an adverse possessor’s claim is legitimate.

Moreover, the Adverse Possessor should file an affidavit of adverse possession with the County Clerk when she begins adversely possessing, but an affidavit can be filed later stating a date when the adverse possession began. When to file the affidavit is obviously a proof issue, and a claim in an affidavit stating a date in the past is less persuasive than an actual filing. The filing of the affidavit provides a record of when the statute of limitations period begins, and notice to the world that you are claiming a right in the property is presumed since the affidavit is a public record.

The wording of the affidavit is very particular – consult an attorney. Likely you will want to get a title report to ensure that your affidavit is correctly drafted. If you can find an owner of record it will be easier to establish a clear chain of title working with them, but you will likely have to pay them for it.

Multiple Owners

If you buy the property with someone else, merely possessing it yourself for the required period is insufficient. You have to perform some type of overt action which clearly indicates that you are holding the property adverse to the other owner(s) interest. Dyer v. Cotton, 333 S.W.3d 703 (Tex. App.–Houston [1st Dist.] 2010, no pet.).

Paying Taxes Is Likely Required, But Risky

If you’re behind in your taxes, get someone to try to adversely possess your land and pay your taxes for you. After they pay up the taxes, you can evict them for trespassing and enjoy the gift they made to you. OK…so that’s a crazy strategy but the law would be on your side! The point here is that it is dangerous to adversely possess land because you will likely have to pay taxes to prevent foreclosure from the local governmental body. If the owner then successfully evicts you, you are not entitled to repayment of those taxes and the law treats paying the owner’s taxes as a gift.

Creating a Chain of Title For The Title Company

Creating a strong chain of title is essential to have an interest in the property you can actually sell. Apart from filing the affidavit, you can deed the party to a friend and then have them deed the property back to you. This way, you, the adverse possessor, will get a recorded deed with your actual name on it. That deed should contain the very specific language required to withstand a challenge to the adverse possession such that the title company will be willing to provide insurance on your interest. This strategy is more of a long term play since your claim to the property will become solidified over time. As such, it is not suitable for investors. There are lots of legal issues that are DYI suitable, but this is not one of them.

What To Do If You Find Out Your Property Is Under Attack?

Take action! Law favors the proactive, especially when it comes to issues like adverse possession which gain credibility over time. Time is especially your enemy given the statute of limitations. The statute of limitations is difficult to defeat even by skilled litigators. Your first step should be to file an opposing affidavit with the County Clerk rejecting the adverse possessor’s claim. If you want to be extra cautious, a declaratory judgment action can be filed, and under the threat of getting embroiled in litigation the adverse possessor will hopefully renounce their claim to avoid the costs of litigation.

What Information Should You Prepare For The Attorney?

Any documentation regarding possession of the property with pictures is a good start. The attorney will be looking to see whether a structure or fence has been erected as well as the care and maintenance of the property including paying taxes. The attorney will also require the legal description which can be found on the County Clerk’s website. A survey of the property will provide the best description, but surveys can be cost prohibitive. The copy of the last recorded deed is useful, and a copy is usually available at the County Clerk’s website.