Even if you waive the contingency, you can still back out of the deal if there are severe defects.
What is adverse possession?
In real estate law, adverse possession allows someone who has been in possession of another person’s land for an extended period of time to legally claim title to the land. Under adverse possession, the plaintiff is not required to pay the land owner, although she must prove her claim to the land in court. Adverse possession is more commonly referred to as “squatter’s rights.”
In certain jurisdictions, when a person occupies someone else’s land without paying rent for a defined period of time and the property owner takes no steps to remove the occupant, the occupant can gain legal ownership of the land. The period is typically 15 to 20 years.
When a court looks at an adverse possession claim, it applies four factors in its decision. To qualify as adverse possession, the trespasser’s occupation of the property needs to be hostile; actual; open and notorious; and exclusive and continuous over a specified period of time. In addition, the trespasser should have paid any applicable local taxes on the property while occupying it.
A qualifying occupation must be hostile. If the claimant has permission from the land owner to use their property, then the occupation is not considered to be hostile.
A claimant must have been actually and physically present on the property, utilizing the land. Proof of this factor is established if there are documented efforts by the trespasser to maintain and improve the property.
Open and notorious means that the claimant cannot have hidden or disguised her occupation of the land. The true property owner should have had the opportunity to notice the behavior of the trespasser.
The trespasser must have used the land exclusively. This means that she must use the land without sharing possession with other parties or the true owner. During the period of occupation, the trespasser cannot have stopped using the property and returned to it later, thereby counting the interim period as continuous possession.
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Adverse possession example
Jacob did not know that his neighbor, Esau, had built a fence and garden several feet beyond his own property line, on Jacob’s land. Esau’s fence and garden are considered a hostile occupation, since he did not have Jacob’s permission to encroach on his property in this way. Esau did not intend to occupy the land, it happened through an honest mistake, relying as he did upon a faulty property description in an old deed when building the garden and the fence. The fence was in Jacob’s plain sight for 20 years, yet when Jacob tried to sell his house and a potential buyer made a property appraisal, the mistake was uncovered and a court found that Esau now owned the land under adverse possession statues.