Laurie R. Hager
503.243.1661 x 220
 

Before Buying Real Estate – Check for Signs of Adverse Possession

March 2011

Laurie R. Hager
503.243.1661 x 220

Published in The Daily Journal of Commerce

These days, there are many opportunities to take advantage of reduced real estate prices on the market.  Those who have found property to purchase are, no doubt, conducting inspections of the property, including an examination of any structures on the property and an investigation of the land's environmental condition.  Although not as commonly done, prudent buyers may also decide to inspect for potential loss of property rights to neighbors. 

There may be good reason to inspect for loss of property rights.  If the seller or a prior owner acquiesced to a neighbor's use of a portion of the property for at least 10 years, the seller may no longer have all rights to that portion of the property.  Here is an example.

In this hypothetical, Property A consists of a building and a parking lot for use in connection with the building.  A neighbor's property, which is adjacent to Property A, consists of a building with a small driveway.  This neighbor operates a restaurant, and there is not enough room on the small driveway or the street to accommodate all of the neighbor's needs.  The neighbor uses Property A's parking lot for overflow customer parking, deliveries to the restaurant, and as a general pathway for access to the restaurant.  The owner of Property A says nothing to the neighbor to either permit or stop the neighbor's use of the parking lot.  If this scenario goes on for a period of at least 10 continuous years, the owner of Property A will lose all or some of its rights to the portion of the parking lot used consistently by the neighbor.  The concept, generally, is that the neighbor has acquired these property rights from Property A by adverse possession. 

The specific circumstances will determine whether the neighbor has acquired full ownership or just an easement (or right of way) over the portion of the parking lot on Property A.  Either way, the neighbor's rights to the parking lot may be enforceable against a purchaser of Property A, even if there is nothing recorded with the county's public records to notify the buyer of the issue.

There may, however, be some clues concerning the potential loss of property rights on Property A to a neighbor.  If, on a given day, tenants, occupants, workers, vendors, clients, or customers use or cross over Property A to access the neighbor's property, further investigation may be appropriate.  A neighbor's use of Property A to place signs or other items of personal property may be another red flag for further inquiry.  You may learn some additional information by simply asking the owner of Property A questions or, if applicable, asking the owner for permission to talk to a tenant of Property A.

Before purchasing real estate, prudent buyers may add to their list of inspections an investigation concerning use of the property by neighbors.  Otherwise, a purchaser may get less than it expected at closing.  Owners or prospective purchasers with any questions or concerns about potential losses of rights to a neighbor may decide to contact an attorney to evaluate the issues.

Related Practice Areas

Business
Litigation
Real Estate and Land Use

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