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Texas Man’s $16 Property Seizure Throws Obscure Law Into Spotlight

foreclosed_home_091410

In this Sept. 14, 2010 file photo, a house in Homestead, Fla. sits empty, for sale as a foreclosure home in a neighborhood where half of the houses were empty and up for foreclosure.

A Texas man who reportedly claimed a $300,000 home for $16 through an obscure legal maneuver known as "adverse possession" is drawing attention to a practice that isn't new and isn't limited to the Lone Star State, but could become more popular with a housing market still flat on its back.

Adverse possession, which allows individuals to take property considered "abandoned," has been around since the 1800s with its origins in British common law and to this day, all 50 states have statutory provisions on their books covering the concept.

It was originally used as a way to deal with the boundaries of farmlands that weren't always clear. For example, if a homeowner put up a fence that encroached on a neighbor's property, the homeowner could claim the territory after a period of time if there was no objection.

"It's kind of a quirky doctrine -- a common-law doctrine designed to acknowledge that if you got possession of a property and no one's been challenging it, you should have some type of title to it," said Larry Morandi, director of state policy research for the National Conference of State Legislatures.

But the concept has evolved, leading to abuses and extraordinary cases.

In Texas, Kenneth Robinson moved last month into a foreclosed home worth $330,000 after he paid a $16 filing fee at the local courthouse, WFAA-TV in Dallas reported. If Robinson stays in the house for three years, he can obtain the title and become the legal owner. In other states, it can take as long as 20 years to become eligible for legal ownership.

Robinson told the local news outlet that the original owner would have to pay off a massive mortgage debt and the bank would have to file a complex lawsuit to get him out the house -- a scenario he said he views as unlikely.

After outraged neighbors asked police to arrest him for breaking and entering, Robinson posted "no trespassing" signs, the station reported, adding that officers said he can't be removed from the house because it's a civil matter, not a criminal one.

Real estate attorneys told FoxNews.com that the practice will become more widespread as foreclosures continue to flood the housing market amid a sluggish economic recovery.

"It's going to be a trend that going to grow more and more," real estate attorney Gennady Litvin said. "We haven't seen the bottom of the real estate market yet."

Real estate attorney Stephen Meister noted that in Florida, some people began forming companies to seize properties on a large-scale basis through adverse possession and rent out the houses. Some were arrested on felony charges.

"People are using this as a sword, not a shield," Meister said.

But some state governments are cracking down in an attempt to discourage abuse of the practice.Just this year alone 11 states, including Texas, have considered bills to clarify, amend, or abolish adverse possession, according to the National Conference of State Legislatures.  

Of the 11, only Florida and Washington state have passed laws tightening the requirements for claiming property through adverse possession. Bills to abolish the concept failed in Alabama, Missouri and Virginia and ones to amend it died in Connecticut, Maine and Texas. Bills are still pending in New Jersey, Michigan and Pennsylvania.

Colorado became the poster boy for adverse possession reform in 2008 after there was a public outcry over a couple losing a third of their land to their neighbors, an ex-judge and an attorney, preventing them from building their retirement home. 

The state passed a law amending the concept, which takes 18 years for property to be legally claimed. The new law, which didn't apply to the couple, put the burden of proving ownership on adverse possessors and gives judges the power to force them to compensate the original owners for back property taxes and interest.

The attorneys said there are many aspects to adverse possession and they vary from state to state. For example, adverse possessors typically have to occupy the land anywhere from seven to 20 years, depending upon the state, before they can make a claim. But as long as it's in the open, it's not a crime. Adverse possessors can even register the bills in their name and notify the bank, previous homeowner or neighbors of their intent.

"You're not just putting the flag up in the middle of the house and saying it's mine," Litvin said. "You've got to live life in the normal, everyday way. If you're there and nobody knows you're there, you're breaking and entering."