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Adverse Possession

Updated on May 9, 2024
Article byIbrahim Zaghw
Reviewed byDheeraj Vaidya, CFA, FRM

Adverse Possession Meaning

Adverse possession gives ownership rights to the occupants of a property or a piece of land, even if they are not genuine owners. So, for instance, if there’s an empty house down someone’s street, they could theoretically take residence in it and, after a while, legally claim the house as their own.

The title is granted when a specific time period and certain other conditions are met, which may differ from state to state. This peculiar law is also known as squatter’s rights, and it is subjected to many provisions for an occupant to claim a right on another’s property.

Elements of adverse possession

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Key Takeaways

  • Adverse possession is an archaic law that is still in effect to this day. It gives people the right to own a piece of property by living on it for a prolonged period. However, adverse possession requires several stringent criteria to take effect.
  • The elements of adverse possession include: Open and notorious, exclusive, hostile, statutory period, continuous and uninterrupted.
  • Today, the typical adverse possession claims revolve around misplaced fences and overextended garages. It is rarely the case that someone tries to take ownership of an entire property through this law.
  • The rules governing adverse possession are not the same in the UK and the US. In the UK, the Land Registration Act 2002 has ensured that the original owners of a piece of property would be notified of an attempt on their land. However, there are six main criteria in the US that need to be satisfied for adverse possession to hold.

How Adverse Possession works?

Adverse possession law allows a person to claim property rights if they can prove that they have possessed that property for a prescribed length of time.

Before talking about the mechanism of adverse possession, let’s discuss why there is such a law, to begin with. Not so long ago, people would normally conquer and pillage other lands. Moreover, this was legal back then, but it also made it very difficult to figure out who the rightful owner of a piece of land was. Adverse possession thus became a legal doctrine under a set of conditions and criteria. Even though we no longer conquer and pillage our neighbor’s land, it exists as a law in countries like the United States and the United Kingdom.

Although the requirements may vary across jurisdictions, there are five common elements for adverse possession law. First, to establish a legal claim to a property through adverse possession, a person must spend a significant amount of time on the property along with the property being “hostile,” i.e., the person does not have the owner’s consent and that they are technically trespassing. The person should also occupy the land in an obvious and open way. Finally, they must stay in the property exclusively and continuously for an uninterrupted statutory period.

During this time, the original owner can kick the person out at any time. However, if the owner does nothing and leaves them squatting on their property for long enough, adverse possession comes into play. The above requirements are called the elements of adverse possession.

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Example

One common example of an adverse possession claim is the continuous use of someone else’s house. This can be with or without the knowledge of the property owner. In any case, the possessor can claim property rights if the property owner has been unaware or indifferent about the property used for a long time. For example, suppose A has given their home to their relative B to live in. B has kept, lived in, paid taxes, and taken care of the property for many years. In the case of a dispute, the law will favor B to access title to the property under adverse possession.

Landowners who rent out property usually keep agreements and bonds with them to avoid adverse possession of their property. So, if a person has any investment properties lying around, they’re safe so long as they know who’s staying in them and for how long.

Nowadays, the typical adverse possession claims include property encroachment through a frequently used driveway, a misplaced fence, etc.

Adverse Possession in the UK

Ever since the passing of the Land Registration Act of 2002, adverse possession has been harder to initiate in the UK.

According to the law, an adverse possessor can claim a piece of land unregistered for ten or more years. But, first, the registered title holder must be notified of the adverse possessor’s claim to the property. Then the titleholder is given two years to reject this claim.

However, if the titleholder does nothing, the adverse possessor can legally own the property. The whole point of this process is to ensure that the original owners of a property would not lose it without being notified of the situation.

Adverse Possession in the US

The five main elements of adverse possession are required for claiming property in the US. The requirements are:

  1. The possession of the property must be “hostile”. This means that the possessor needs to be on the property without the owner’s permission. So, if they are renting or leasing the place, the possessor can’t claim adverse possession.
  2. The possession of the property must be “actual”. This means that it is not enough to be physically on the property. They also have to use and maintain it as if it were their own. Ergo, they need to pay the bills, trim the lawn, clean the carpets, and pay the property taxes.
  3. The possession of the property must be “open and notorious”. This means that other people, especially the surrounding neighbors, need to be aware of the use of the property. The reason for this criterion is that it allows the actual owner to realize that someone is squatting in their property. And they also should have enough time to do something about it.
  4. The possession of the property must be “exclusive”. This means that if someone wants to have a legal claim to the property, they can’t be sharing it with anyone else. More importantly, the original owner cannot live there or use the property in any fashion. Otherwise, they would have no legal claim to the property.
  5. The possession must be “continuous.” This means they need to live on the property in question continuously. They also can’t just drop by once a year and hope it will do the trick.
  6. The possession must cover a certain period. In some cases, it can be only five years. But in some states, they need to stay for as long as forty years before they can claim a piece of property as their own.

What happens once all the criteria are met?

Assuming that one has satisfied the above criteria, they can claim the property that would supersede the original owner’s claim. Interestingly, the property’s title doesn’t transfer from the original owner to the person. Instead, they get a new title.

It’s sort of as if the property has two owners. But the one who can legally claim adverse possession has a stronger title that can trump the original one.

Frequently Asked Question (FAQs)

What is adverse possession in real estate?

The adverse possession in real estate refers to the act of taking over someone else’s property if it has been abandoned or leased out for a long time. Under certain conditions, a stranger or a tenant can claim the right to a property or land title.

Does adverse possession apply to new owners?

People can only claim adverse possession if they have possessed that property for the statutory period. However, this time period can be different for different jurisdictions. Therefore it is impossible for new property possessors to claim property rights.

How to prove adverse possession?

A possessor has five main requirements to claim property rights under adverse possession laws. The possession should be hostile, exclusive, open, continuous, and must meet the defined time limit. Adverse possession can be either intentional or unintentional on the possessor’s part.

This has been a guide to adverse possession and its meaning. Here we explain how adverse possession laws work along with examples (US, UK) and claims. You may learn more about financing from the following articles –