Squat to own: Adverse possession going mainstream?

Can't afford a house? That's not stopping some people from snagging their dream home through an old real estate law known as adverse possession.

Whether you call them squatters or trespassers, people who dwell in abandoned or unclaimed properties can eventually earn ownership through tenants' rights.

In general, laws require an adverse possessor to live on the land openly and notoriously, as a true owner would. Secret occupation doesn't give the occupant any legal rights. Maintaining or improving the property also demonstrates open and notorious possession.

Tenants who made an honest mistake and are occupying the property by relying on an invalid or incorrect deed can also find protection under adverse possession.

For adverse possession to work, squatters have to stay in the home for a minimal time period as mandated by the state. This time frame varies widely by location. The statutory period is just five years in California, seven years in Florida and a whopping 21 years in Pennsylvania.

During that time, many states, including those listed above, require the trespasser to have paid property taxes. Some states may also require the trespasser to have some kind of document.

The antiquated law's original purpose


Adverse possession was put on the books hundreds of years ago when the law primarily applied to farm land.

Property records were easily lost and damaged then, and adverse possession was a way to keep land in productive use when it wasn't clear who owned or inherited the land.

The "open and notorious" clause was relevant to those using seemingly abandoned property to produce goods.

"Say I take control of a field, build a fence around it and till it, that's open and notorious possession," says Mark S. Schecter owner of the real estate law firm,  Schecter Law , in Fort Lauderdale, Fla.

In modern times, adverse possession has been used in minor property line disputes, such as neighbors putting up fencing near, but not on, the actual boarders of the property.

Taking advantage of the law today

A handful of squatters have created famous adverse possession cases. Still unfolding is the story  of 23-year-old Brazilian national Andre Barbosa's tenancy in a $2.5 million Boca Raton, Fla. mansion.

The foreclosed luxury home was empty for about a year and a half as Bank of America took possession of it, and Barbosa claimed adverse possession.

Police had their hands tied when it came to removing the trespasser. Barbosa presented proper adverse possession paperwork, presumably a  DR-452  form available online from the Florida Department of Revenue.

However, a simple lawsuit can take a squatter out of possession, and Bank of America has already filed a suit.

It doesn't look like Barbosa's efforts will manifest into a successful squat-to-own case. With just a civil process required to remove trespassers, it's unlikely for most squatters to successfully become homeowners through adverse possession. The bank or property owners are likely to show up at some point to reclaim their property.

Even if Barboasa had succeeded in scoring a waterfront home, the property would still come with a price.

"In that area, property taxes are about $35,000 a year," says Schecter. "So he'd have to pay those for seven years, which amounts to nearly a quarter million dollars."

In the past three years, 38 claims of adverse possession have been made in Palm Beach County, according to the Palm Beach County Property Appraiser.

And according to  RealtyTrac , Florida has the highest foreclosure rate of any other state, making it a hotbed for homes that are just sitting there, open to attracting squatters.

So if the real estate world is an oyster for squatters, could more trespassers become emboldened to take a stab at adverse possession?

"Squatting is making headlines. Anytime you read something in the paper, you get copycats," says Schecter. "It could also force lenders to take care of their properties."

Perhaps mortgage companies will begin focusing on their current mortgagors before reaching the point of repossession and extended vacancies.

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