Hello everybody. My discussion this month focuses on a surprising ruling concerning adverse possession in a case just decided by the California Court of Appeal. Specifically, the Court endorsed an exception to the (traditionally believed) requirement that a party claiming adverse possession on an adjoining owner’s property must always pay real estate taxes and assessments to acquire ownership of the property.
Before discussing the litigation, let me review with you the nature of adverse possession and compare them with a similar aspect of real property law known as prescriptive easements. For simplicity purposes, we will start with easement law and then to turn to adverse possession.
What is a Prescriptive Easement?
You may already know or recall from some of my prior AOA Magazine articles, a prescriptive easement confers a property right on a neighbor to use an adjoining owner’s land merely because the neighbor used that property throughout the preceding five years without the owner’s consent. It differs from adverse possession in that adverse possession effects a transfer of title. That is to say, with adverse possession, the neighbor becomes the owner of the property that he used for the preceding five years, but with a prescriptive easement, he does not.
Through an easement by prescription, the neighbor merely acquires a right to have a shared use of the land with the adjoining owner, but not exclusive use and there is no transfer of ownership.
Specifically, the elements which must be satisfied for a neighbor to acquire a prescriptive easement on the other party’s land are the following:
- Visible usage, or as we say in law, “open and notorious use”
- Continuous usage, or nearly so
- Hostile or adverse use to the owner’s rights in his own property
- Usage without the owner’s express or implied consent.
- Usage for at least five years
At the end of the five years, the neighbor who fulfils all of the above requirements acquires an easement by prescription. Unfortunately, the only way that the neighbor can prove that he/she has obtained that easement or otherwise have it insured by a title company when he sells the property, is to obtain a judgment in Court declaring that the easement exists.
Two additional considerations are important relative to the acquisition of a prescriptive easement.
First, even though the usage must be for five years, the use need not be solely by the claimant neighbor. While usage must span a collective total of five consecutive years, it may be occasioned by the claimant, the claimant’s predecessors, or even the claimant’s tenants (on behalf of the claimant). Thus, if the seller of the property to the neighbor used the adjoining owner’s land for three years and the neighbor then uses it for two years, that will satisfy the five year requirement. Also, usage by a neighbor’s tenants, such as driving on the adjoining owner’s driveway for convenience purposes, might inure to the benefit of the claimant neighbor.
Second, if the neighbor excluded the owner from the owner’s land during any portion of the preceding five years (such as by erecting a fence or a wall on the owner’s land), then the neighbor will not acquire a prescriptive easement. The reason for that limitation is that the very notion of an easement connotes shared usage. If the neighbor excludes the owner from the owner’s own land, then the usage was exclusive, rather than shared.
What is Adverse Possession?
Adverse possession is similar to a prescriptive easement, except that title actually transfers to the neighbor. The owner is thereupon divested of his ownership of and title to all or a portion of the land that the neighbor acquired.
Unlike a prescriptive easement, adverse possession does not imply shared usage. Instead, with adverse possession the neighbor typically uses the land for himself and excludes the owner, such a by the erection of a wall or fence.
The elements of adverse possession are the same as a prescriptive easement, with the addition that the neighbor must pay the real estate taxes and assessments levied on the owner’s property.
Interestingly, the law does say that the owner cannot also pay taxes on his property. Judicial rulings simply require that the neighbor pay the taxes and assessments before the owner pays them. Conversely, if the owner pays the taxes and assessments prior to the neighbor’s payments, then adverse possession is defeated.
Also, and similar to a prescriptive easement, a neighbor who acquires adverse possession of the owner’s property must file a lawsuit to perfect that interest. Without a Court judgment recognizing the adverse possession, the neighbor cannot transfer marketable title to his/her successor of the adjoining owner’s land.
New Twist of the Law
On April 3, 2013, in a case entitled Hagman vs. Meher Mount Corporation, the decision of the California Court of Appeal revealed that there is a mistake in the commonly understood belief that the neighbor must pay real estate taxes and assessments to acquire adverse possession of an owner’s land. The error is that if taxes are not assessed on an owner’s land, then the claimant need not pay taxes as a precondition to acquire title.
In the Hagman litigation, the owner was a non-profit religious corporation that had a tax exempt status. Because of that status, no taxes or assessments were levied on the corporation’s property.
The neighbor, Hagman, argued that the adverse possession law only requires payment of taxes and assessments actually levied on property. Conversely, the nonprofit organization maintained that since no taxes or assessments were paid at all, Hagman could not acquire ownership because adverse possession always requires payment of taxes and assessments.
The appellate court sided with the claimant neighbor concluding that the payment of taxes and assessments is only required on such amounts which are in fact levied on the property. If no taxes are levied, then none needs to be paid. Thus, because no taxes or assessments were levied on the nonprofit organization’s land, adverse possession was acquired by the neighbor even in the absence of payment of any taxes or assessments.
The facts of the Hagman boil down to this: The neighbor (Hagman) owned a thirty acre parcel of land inOjai,California. In 1987, he erected a fence on what he believed was the boundary of his property. In fact, the fence encroached by nearly a half acre on the religious institution’s adjoining 173 acre parcel.
After two years of litigation before the Superior Court and the Court of Appeal, the case was finally resolved with Hagman owning the additional acreage even though he was mistaken about the correct location of the boundary, and even though he paid no taxes or assessments on the neighbor’s land. The Court confirmed that he had acquired title to the area between the boundary and the fence he built on the adjoining owner’s parcel.
While it will be a rare case for an apartment owner to encroach on the land of a nonprofit organization, it is not a rare occurrence that he or his tenants use an adjoining owner’s land, or the next door owner uses the apartment building land, such as for pedestrian or driveway purposes. Such usage may create a prescriptive easement. For that reason, it is most prudent for all AOA members to know where their boundaries are and take appropriate steps to protect against any trespasses or encroachments on their own land.
The only conclusive way to determine the location of a boundary is to have a licensed surveyor prepare a survey. For an AOA member who has the slightest concern that his neighbor is encroaching on the member’s land, or believes that he/she may be encroaching on the other’s property, the prudent action to take is to engage a surveyor to make a definitive determination.
Dale Alberstone is a prominent litigation and transactional real estate attorney who has specialized in real property law for the past 36 years. He has been appointed to periodically serve as a judge pro tem of the Los Angeles Superior Court and is a former arbitrator for the American Arbitration Association. He also testifies as an expert witness for and against other attorneys who have been accused of legal malpractice.
Mr. Alberstone has been awarded an AV rating from Martindale-Hubbell. An AV rating reflects an attorney who has reached the heights of professional excellence and is recognized for the highest levels of skill and integrity. You may Google “Dale S. Alberstone” for further background.
The foregoing article was authored on May 1, 2013. It is intended as a general overview of the law and may not apply to the reader’s particular case. Readers are cautioned to consult an advisor of their own selection with respect to any particular situation.
Address correspondence to Dale S. Alberstone, Esq., ALBERSTONE & ALBERSTONE, 1801 Avenue of the Stars, Suite 600, Los Angeles, California 90067. Phone: (310) 277-7300.