Out of Sight, Out of Mind, Out of OWNERSHIP??
Most people assume when you buy a property you own it until you sell it or transfer title…right? There is a law that can sometimes come in to play if the use of a property is neglected. There is a piece of law called “Adverse Possession” that gives trespassers on a property the ability to gain title of the property if they have used it as their own for a prescribed period of time. There is certainly more than that to this, but it is not as high a bar as you would imagine.
Susan McCall, Owner and Designated Broker at Commercial Property Connect, LLC, will often tell prospective clients a cautionary tale of a person that once went to purchase a property. As it turned out there was an elderly woman that lived across the street from this property, and she would walk to the local market each day by taking a shortcut through this property rather than walking to the end of the block and over and back up.
The owner of the property did not occupy the property, so they were not even aware of this routine that had been occurring for years. The occupants of the property did not see any harm in this action, so it was not something they ever complained about. The lady had never asked for or been granted permission by the owner of the property to use this path. When the buyer went to purchase this property, the little lady was able to make a claim that she could continue walking the same path she had walked for many years. Under Arizona law this lady had to demonstrate several elements related to the use of the property. Number one, that her use of the land had been “open and notorious.” Meaning had she done it right there in front of everybody regularly without a challenge.
Sometimes this is also referred to as “peaceable possession.” In this case she had kept this routine without a problem from anyone, in fact she had been walking the same path over the property daily, often greeting the occupants of the property. The second hurdle she had to get over was the fact that she had “continuous use” of the property. The time period stated is a ten-year period without interruption. So, for instance if she had moved away for a couple of years and then began walking the path when she moved back and had not actually been maintaining the use UNINTERRUPTED for a period of ten years then she would not meet this hurdle. She had in fact been doing this more than ten years without interruption. Ultimately in this case the new owner of this property had to give use and OWNERSHIP of that path to this woman.
Another example of this might be two neighboring properties that are not fenced. These two commercial properties are on large parcels of land. Business A builds a shade structure on his property that is partially built on the neighboring property. Business Property B does not really feel impacted by the structure and because there is not a dividing wall, she is not actually aware that the structure is encroaching on her property. The employees of Business A enjoy this shade structure for years on their lunch breaks etc. After ten years later Owner B goes to sell her property. The prospective buyer does an ALTA survey in connection with the purchase, and it is discovered that this structure is built on both Property A and Property B. In this example Property A can establish that he owns the land on which he is encroaching. During that ten-year period Property B could have requested the structure be removed or agreed to some sort of rental agreement for the use of that land…. but she didn’t. So, in this case it is likely an Arizona court could side with the owner of Property A.
Now, this is not that common, but it is one of those things that an ounce of prevention is worth a pound of cure! Therefore, Susan explains the possible scenarios in which this can occur when she coaches her clients that are buying property to consider purchasing an ALTA survey and additional title protection from the Title and Escrow provider. At minimum, the buyer should be educated and make the decision if they want to take the risk. If you are already a property owner, you must be aware of the goings on and around your property, especially if you do not occupy the property. You must communicate with the occupants about any access to the property by people who are not entitled to use or access the property. No matter how minor or harmless something might seem you need to address it so that it does not go uninterrupted or addressed in some sort of agreement.
There are multiple facets to the Arizona Adverse Possession laws. We wanted to point out how something unnoticed could ultimately affect the ownership of your property, but in reality It is a far more complex subject than can be easily summarized in a short article. Additionally, laws in other states will vary around what is considered adverse possession, so you would be well served to consult with an experienced real estate attorney or title and escrow provider to make sure you are covering your bases.
