$16 for a house. Is it truly possible?

By
Real Estate Agent with Sand Dollar Realty Group, Inc. BK627826
https://activerain.com/droplet/frT

You may have seen the news story about the man in Texas that supposedly paid $16 for a luxury home worth over $300,000 in an exclusive gated community.

Man who took possession of $330K home for $16

The story is an interesting one, but not a new one.  In fact "adverse possession" laws have been around for hundreds of years dating back to English common law and are in effect in pretty much every state in America.  The premise is that someone who is in possession of a property and obviously using it after a certain period of time should not be able to be kicked out of the property by the heirs of some old owner due to some old title claim.  The adverse possession laws also are in place so that abandoned properties at some point can get back into being productive and useful to society. You can read more about the history and definitions of adverse possession on Wikipedia.

The general common law requirements for adverse possession can be found in the acronym H.O.T.C.A.N.E.  The occupant's possession must be Hostile (not with someone else's approval like a lease or easement), Open (not trying to be concealed or hidden from others), paying property Taxes on the house, Continuous use for whatever the statutory period is (no occasional or seasonal use), Actual use of the property (not simply walking your dog in the lawn every morning), Notorious (obvious to everyone often by fencing off land or occupying a home), Exclusive (one owner cannot use adverse possession to eliminate the rights of other co-owners).

Many states have their own additional rules as well regarding adverse possession.  In Florida, the requirement is 7 years of continuous adverse possession.  Some states require 20 years or more of continuous use.  The rules typically differ if there is "color of title" which means some sort of legitimate written claim to the title like a deed or inheritance as opposed to someone simply squatting in a property.

The Florida law on this subject can be found in Chapter 95, Florida Statutes, FS 95.16 and 95.18.  Due to abuses similar to those in the Texas story, the Florida legislature made significant changes to 95.18 this past Spring by passing Senate Bill #1142 which requires the possessor to notify the county property appraiser and the record owner what they are doing with the property among other things.  You can watch some of these adverse possession abuses in the story below. 

In all of these cases however, the reason the record owner abandoned the home was because it was in foreclosure.  The law in pretty much every state will allow the foreclosing bank to eventually force the adverse possessing occupant to move out and be evicted.  The only exception would be if the occupant were on a legitimate lease that complied with federal foreclosure laws, then the tenant might be able to stay for a certain period of time.  However if someone were a tenant under a written lease, then they would be out of compliance with the "hostile" part of the adverse possession laws anyway - sort of a catch-22 for them.

This article is meant to be for educational purposes only. I am not a lawyer and don't pretend to be one. Pretty interesting stories though.  

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Rainer
139,717
Jeanne M. Gavish
Jeanne Gavish, Keller Williams Realty Elite Partners - Spring Hill, FL
Keller Williams Realty Elite Partners - CIPS,GRI,S

Rob, I am currently teaching a Florida Sales Associate Pre Licensing Class and one of my students emailed me the link to this article the night after we discussed Adverse Possession.  It is rare here in Florida, but it does happen.  Texas being 3 years is scary!

Jul 23, 2011 01:59 PM #1
Rainmaker
1,231,360
Wallace S. Gibson, CPM
Gibson Management Group, Ltd. - Charlottesville, VA
LandlordWhisperer

It is more common in the country where maintaining roads, cutting fields and getting mail can be considered OPEN use of the property.

Jul 23, 2011 02:15 PM #2
Rainmaker
2,730,072
John Pusa
Berkshire Hathaway Home Services Crest - Glendale, CA
Your All Time Realtor With Exceptional Service

Rob - The man paid the $16 fee and followed the law. It might appear strange and wrong, but he did not violate the law, and for that reason will stay in the property. It is similar someone paid $10,000 to a property valued at $2000,000.

Jul 23, 2011 05:15 PM #3
Rainer
77,960
Mike Morrison
Will & Will Real Estate Brokers, The Woodlands, Texas - Houston, TX

Rob- this is quiet common in rural areas of Texas. Usually in areas where timber is common. I own timber property in E. Texas. I check on it about every 90 days for this very reason. During deer season, I am constantly tearing down deer blinds on my property.

Several attempts have been made to amend "adverse possession" to no avail. Adverse possession was how the carpetbaggers punished Texas for our part in the civil war. Except, at that point in history there was usually no time period for the adverse possession, Sherman's troops just shot or hung the land owners.The land speculator then just filed a new deed of trust. 

Jul 23, 2011 06:26 PM #4
Ambassador
2,737,312
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

In Maryland, the time is 20 years.  In Virginia, the time is 15 years.

However, this law is primarily used for a one foot sliver of land on which a fence has stood through the years without the knowledge of the owner.

Leave it to the media to highlight another "impossible dream" to consumers.

Jul 23, 2011 11:28 PM #5
Rainmaker
1,142,035
Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time

Adverse possession does happen. In fact in some very rural areas it can even be quite common. The CA desert is a perfect example. Many folks used to just pull off the road in their camper and stake a claim.

On a different topic: I find it quite sad that whoever posted that video on YouTube felt the need to put "black" in the title. What does that have to do with anything?

 

Jul 24, 2011 02:44 AM #6
Rainmaker
1,016,721
Rob Arnold
Sand Dollar Realty Group, Inc. - Altamonte Springs, FL
Metro Orlando Full Service - Investor Friendly & F

@ John.  I'm not convinced that he "did not violate the law." Breaking & entering is illegal in pretty much every state.  What happens if the homeowner shows up 3 months from now from their European vacation? But I get it.  Adverse possession laws are on the books for a reason.

@ Bryant. The whole video title is ridiculous. Not sure why someone would even bring up the topic. But it was the clearest version of the video I could find on YouTube. I've had 3 people ask me how they could do something similar in Florida so felt the need to post the article.

Jul 24, 2011 04:07 AM #7
Rainmaker
1,016,721
Rob Arnold
Sand Dollar Realty Group, Inc. - Altamonte Springs, FL
Metro Orlando Full Service - Investor Friendly & F

I did a little more searching around on YouTube and found the same video with a different title. Thanks Bryant for pointing that out.

Jul 24, 2011 06:06 AM #8
Rainmaker
128,073
Tchaka Owen
Galleria International Realty - Hollywood, FL

Some fools tried that in my neighborhood 2 years ago and the police put a quick end to it.

Jul 25, 2011 12:44 PM #9
Rainmaker
229,831
Nathan Tutas
Tutas Towne Realty, Inc. - Davenport, FL
Your Central Florida Real Estate Expert

Some of those other home owners sounded mighty jealous to me. I bet they wish they had thought of it first. Survival of the fittest. The law is the law and he now has a right to the home. What a sweet deal!

Jul 27, 2011 12:45 PM #10
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Rob Arnold

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