What are Squatters Rights?

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The best scenario for a squatter to assert its rights is the holdover tenancy long after a lease expires. The tenant knows of the absentee landlord’s lack of diligence regarding site visits and removing a renter under eviction laws. The absentee landlord assumed the tenant vacated at the expiration of the lease.

The laws of a landlord-tenant relationship are discussed in this article to explain certain parallels between a defaulted tenant and a squatter. Let’s be clear—there does not have to be a prior landlord-tenant relationship between the real estate owner and the squatter. This article offers this additional scenario to the common perception of a squatter choosing vacant property by chance.

It is the objective of owners of rental property to lease out a rental property for profit. The owner is willing to surrender some of the ownership rights in exchange for payment of a specific amount of money paid in installments over a set period. The amount, time, and payment periods are mutually agreed upon between the owner and the third party.

This is the creation of a lease to establish a tenant’s rights and obligations to perform. By virtue of the lease, the owner surrenders its legal right of actual possession, use, and enjoyment of the property to the renter. Upon the full execution of a lease, the relationship between the owner and the third party becomes that of a landlord and tenant, and the enforcement of the lease falls under the state’s landlord-tenant laws.

If the tenant complies with the lease terms, the landlord cannot enter the property and disrupt the tenant’s use, exclusive possession, and enjoyment. But, what happens when the tenant defaults or the lease expires on its terms, and the tenant refuses to leave? At what point does the defaulting tenant become an unauthorized occupant or a squatter?

What happens if an owner never intended to surrender possession but finds that the squatters’ right to actual possession takes precedence over the owner’s legal right of possession?

This article aims to guide and advise owners of investment property on the definitions and scenarios to prevent the merit of a squatter’s legal claim on the grounds of possession.

It is not in the owner’s best interest to have the actual possession dispute removed from the premise of the landlord-tenant laws and into the category of adverse possession laws. The merits of a squatter’s legal claim are predicated upon the inactions of the property owner.

Definition of a squatter

The general definition of a squatter is one who unilaterally decides to occupy a structure or a parcel of land without the owner’s permission or an unauthorized occupant. Each state has its laws as to the rights of squatters and the periods within which the legal title holder must act; however, the underlying definition of a squatter is universal.

The merit of a squatter’s claim to occupy the property of another is actual possession. The length of time the squatter remains in possession without a notice to vacate will strengthen a claim of rightful possession by the squatter.

History of squatter’s rights

There was a time in the history of the US when squatting, homesteading and the doctrine of adverse possession were necessary to expand our country’s boundaries. The Federal government enacted the Homestead Act of 1862 to protect the rights of pioneers to occupy land perceived as vacant and to establish a homestead.

Unfortunately, over a century and one-half later, the remnants of this Act remain. The squatters’ rights of today are a narrower version of the Homestead Act of 1862.

Landlord-Tenant Laws

The laws affecting the relationship between a landlord and a tenant differ in each state. However, the basic definitions of landlord and tenant are constant. The subject matter of a dispute is the use, continuous possession, and enjoyment of the property encumbered by the lease.

When a rental property owner wishes to lease its property, most owners focus on the laws governing the landlord-tenant relationship but ignore the laws governing trespassers and the squatters’ claims under the color of title.

The owner must educate themselves on all laws governing actual possession, adverse possession, and trespassing in the state where the property is located. It is the knowledge gathered by the time and effort expended by the owner to learn these definitions and the rights and procedures for enforcement. The owner needs to know and understand the state laws relating to a squatter.

Defaulted tenant

It is not a landlord that establishes a tenant’s default—it is the court. Although the procedures will differ from one state to another, the tenant’s breach of the lease will lay the ground for a landlord to file a suit to establish the default. The default judgment will empower the landlord to evict. A landlord does not have the right to take this action independently.

This premise holds true for a squatter.

When dealing with renters or squatters, the key factors are action, knowledge, and permission.

For example, when a lease expires on its terms and the landlord extends a tenant’s continuous possession for a specific period of time for an established consideration, this action is known as a tenancy at will. The action by the landlord does not deem a tenant in default, nor is the tenant an unauthorized occupant.

A tenancy at sufferance is when a tenant refuses to leave the property at the end of the lease. There is no agreement or permission from the owner for the tenant to remain. This is the time for the owner to act by serving a notice to vacate and beginning the eviction process. The proper serving of a notice to vacate will negate any squatter’s right a tenant may assert.

It is the responsibility of the property owner to act diligently when dealing with a holdover tenant. A holdover tenant becomes neither a trespasser nor a squatter due to the owner’s knowledge of their presence.

A formal notice to vacate must be properly served upon the tenant advising of the specific periods to act. It is advisable also to demand the removal of all personal property at the time of the move-out. After these periods of time have passed, the tenant can no longer assert the rights afforded to a squatter.

The merits of squatters’ rights

To fully explain squatters’ rights, it was necessary to provide some details of a lease agreement. This detail is not meant to lead the reader to believe there needs to be a prior landlord-tenant relationship between the valid owner and the squatter.

The discussion regarding the lease is meant to establish the squatter’s right of continuous possession. Regardless if the lease has long expired, it was the inaction of the owner to enforce the eviction laws that lent to the merits of the squatter’s presence.

A significant difference between a squatter and a trespasser is the circumstances of entry. A squatter does not damage the property upon entry. If a fence or a door is not locked, a window is broken, or a screen door is left ajar, then no damage results from entry. This is also no damage upon entry if a squatter is a tenant under a lease. Although the lease is no longer a factor in the relationship, the circumstance of access holds.

The merits of a squatter’s claim of legal ownership are the abandonment by the property owner or the perceived abandonment by the squatter and the law.

A squatter needs to be evicted like that a tenant. The eviction of a squatter is a civil matter and not a criminal offense like that of a trespasser. The property owner has no grounds to evict a squatter or to remove any of the squatter’s possessions in its own right. The court grants this right.

Law enforcement officers will remove trespassers from private property if it can be established that the person is, in fact, a trespasser. If there is doubt in the officer’s mind, then the person remains in possession of the property until a court orders an eviction.

Establishment of squatters’ rights

The actions of a squatter and the inactions of the true owner establish the claim by a squatter of legal ownership. Each state has a specified number of years, known as the statutory period, during which a property owner must institute a civil action to evict a squatter. Should the statutory period pass without the action by the owner or a property management company, then the squatter can, under state law, claim the legal right of ownership of the real property under the color of title.

An owner needs to know that such a claim takes several years, not days or months. The statutory period under state law can be as short as five years, like in California and Montana, or as long as 30 years, like in New Jersey and Louisiana.

However, the circumstances of a squatter’s possession are specific, and all conditions must be met. A squatter must establish that the period of possession includes all the following qualifications:

  1. the entry into the property did not result in any damage;
  2. the squatter paid the property taxes;
  3. the property was under the exclusive possession of the squatter;
  4. the squatter maintained actual and continuous possession;
  5. the possession was open, discoverable, and notorious to the public; and
  6. the possession by the squatter had not been deemed a nuisance or a threat to others.

For an adverse possession claim to have merit and basis of fact, the squatter must prove that all of the above conditions were met and remained in place passed the period established by the state. It must be noted that the property’s condition, as to order and repair, is not a requirement of a claim for adverse possession.

Loss of squatters’ rights

The right to pursue legal title under adverse possession laws will be barred if any of the following holds:

  1. the squatter did not pay property taxes;
  2. the eviction notices were ignored; or
  3. damage to the property resulted from entry.

If any of these conditions can be proven, then the squatter may fall into the classification of a trespasser and can be dealt with as such. However, a court needs to make this determination, not the unilateral action of the property owner.

Protect your property from squatters

The best protection taken by an owner to protect its property from squatters is knowing the laws that protect squatters’ rights, taking action, and remaining vigilant.

Securing the boundaries and the exterior perimeter of a structure with lights, alarms, and “No Trespassing” signs in visible, strategic places will go far in establishing the owner’s intent of not allowing or authorizing others upon the property. All fences, doors, windows, and other entry points should be secured and locked. Any breach of entry can be monitored in real-time. This surveillance will prove the circumstance of trespass to law enforcement.

However, if a person enters upon land or in a structure without damage, then the person is a squatter and is afforded the rights of a squatter unless proven otherwise. Squatting is a civil matter, and law enforcement cannot, and will not, take action without the appropriate court order.

Along with properly securing the property, there need to be consistent visits by, or on behalf of, the owner. The owner needs to be in a position to deal with trespassers, not squatters.

Final remarks

Unfortunately, remnants of the Homestead Act of 1862 remain today. However, the laws protecting squatters’ rights would not happen without the inaction of the property owner.

The adverse reaction of a property owner when the presence of squatters is discovered is understandable. The owner must remember that neither the people nor their possessions can be removed from the property without a court order. Squatters need to be evicted, much like tenants. The civil procedures for eviction must be followed according to the laws and the rules established by the state where the property is located.

An owner must also remain cognizant that a squatter’s rights cannot be asserted when there is a vigilant owner acting in a timely fashion to begin the proper eviction proceedings. It is more the inactions of the owner than the actions of the squatter that strengthens a claim of ownership by adverse possession.

An absentee property owner’s responsibility is to secure vacant property, pay property taxes, and outsource regular site visits to a property management company. Otherwise, the property owner is inviting an adverse possession claim. An absentee owner must decide on the use or the disposition of a vacant property.

This owner does not have the luxury of time.

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