Squat to Own

185574552There’s a new breed of squatter—White Hat Squatters, if you will—who are saving depressed neighborhoods from the blight of abandoned properties and gaining ownership though adverse possession.

In what it calls “a grey area of the law,” the KALW blog profiles an example of this new type of squatter working on a house in Oakland. The squatter has done extensive repair work on a dilapidated house with a deceased owner and no one else showing interest in it. The local neighborhood association appears to welcome the squatter and his improvements.

When memorized in first-year law school property class, the elements of adverse possession may have felt abstract and academic; but for squatters taking over abandoned properties, they are the roadmap to a free house.

In California, adverse possession is a statutory scheme that follows the common law process of clarifying title by taking it away from those who “sleep on their rights.” Basically, it’s a “you snooze, you lose” rule with clear requirements on the squatter.

To successfully assert adverse possession, the squatter must prove that

  1. The possession is held under claim of right or color of title;
  2. The possession is an actual, open, and notorious occupation that constitutes reasonable notice to the record owner;
  3. The occupation is exclusive and hostile;
  4. The occupation is uninterrupted and continuous for at least 5 years; and
  5. The possessor timely paid all of the property taxes for the same period.

A “sleeping” owner of record who wakes up and wants to recover the property must bring an action within 5 years of the end of his or her (or his or her predecessor’s) possession of the property (i.e., the time at which the adverse possession began). Robertson v Superior Court (2001) 90 CA4th 1319. Essentially, the running of the 5-year limitations period for bringing an action to recover real property is the same as the 5-year period of use and occupancy required to establish title by adverse possession.

If the squatter successfully claims adverse possession, he or she gets permanent title to the property along with the right to exclusive occupancy and possession without owing any compensation to the original record owner. Warsaw v Chicago Metallic Ceilings, Inc. (1984) 35 C3d 564, 574.

Squat to own has been used in the very depressed housing markets of Detroit for years. What do you think of this use of adverse possession? Are White Hat Squatters a good way to kickstart gentrification of a neighborhood?

Anyone practicing in this area of law should check out CEB’s Neighbor Disputes: Law and Litigation, chapter 2 (on Encroachments and Boundaries). Squatter issues are discussed in chapter 9.

Related CEB blog posts:

© The Regents of the University of California, 2014. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited.

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