DAVID J. WILLIS ATTORNEY
Copyright © 2018. All rights reserved worldwide.
Adverse Possession in Texas
by David J. Willis J.D., LL.M.
Legitimate adverse possession claims are rare. Rather than happening as a singular event, they tend to accrue incrementally over the years without notice or fanfare. Classic adverse possession claims include the family that gradually takes over the empty lot next door to their home, or the rancher who has fenced in an adjoining tract and pastured his cattle there for a decade.
Adverse possession refers to circumstances under which one may lawfully lay claim to ownership of property not originally one's own. The statute governing adverse possession is Civil Practices & Remedies Code sections16.021 et seq. It defines adverse possession as "an actual and visible appropriation of real property, commenced and continued under a claim of right that is inconsistent with and is hostile to the claim of another person." Case law adds that it must be true that the possessor of the property actually does openlypossess it (the belief of entitlement to possess is insufficient), has possessed it continuously for the statutory period (sporadic possession is insufficient), and that the possessor peaceably asserts a claim of right adverse to and exclusive of all others (possession shared with an owner is insufficient). All of these are fact issues for a court to decide. Kinder Morgan N. Tex. Pipeline, L.P. v. Justiss, 202 S.W.3d 427, 438 (Tex. App.—Texarkana 2006, no pet.).
It is not enough to be merely caring for property temporarily, or even paying the taxes on it, until the owner reappears. One can pay taxes on someone else's property for years, but if other adverse possession requirements are not met, then those payments are nothing more than a gift to the owner.
Intent is Important
In order to become a successful adverse possessor, actual possession must occur along with an unambiguous intention to appropriate the property from the record owner. The phrase occasionally used in the case law is "hostile intent" which connotes both a state of mind and a range of actions that are clearly designed to exclude all others. If these factors are uncertain or difficult to prove, then a claim of adverse possession will almost certainly fail. Nac Tex Hotel Co., Inc. v. Greak, 481 S.W.3d 327 (Tex.App.—Tyler 2015, no pet.).
So you want to make an adverse possession claim to the west forty acres north of the railroad tracks? Not good enough, at least not if you will be utilizing an adverse possession affidavit. The location and boundaries of land claimed must be determinable with reasonably certainty, and that means there must be a proper legal description (lot and block or metes and bounds). This may necessitate a survey, especially in the case of rural property. One alternative is to obtain such a survey first and then file an affidavit of adverse possession with the survey attached as an exhibit; another option—if it is urgent to put an instrument on record immediately—is to file the affidavit with the property description as it is currently available and then later amend the affidavit to include the full metes and bounds.
Strict Rules Apply
Adverse possession rules are specific for a reason. As the Texas Supreme Court has stated, the adverse possession "doctrine itself is a harsh one, taking real estate from a record owner without express consent or compensation." Tran v. Macha, 213 W.W.3d 913, 914 (Tex. 2006). The statute sets forth rules and conditions under which the doctrine applies, and these must be conclusively met. Close enough is not good enough. In the event adverse possession is litigated, all issues become questions of fact to be decided by the court.
The statute is structured in such a way as to require an affirmative act by the original owner to reclaim the property within certain periods of time, referred to as statutes of limitation. If the original owner is prevented from taking the property back by means of peaceable self-help, then he or she must file a trespass to try title suit to establish legal ownership and reclaim possession. If the original owner does not act, then his or her claim is barred and the adverse possessor prevails. The doctrine of adverse possession does not apply to public lands or against a government entity.
The Various Statutes of Limitation
Adverse possession law is based on notice along with the opportunity to respond to that notice. The legitimacy of an adverse possession claim is established when circumstances are such that it is visible to others—meaning others are or should be on actual notice that the possessor is asserting a claim of right to the property which is actual, open, notorious, exclusive, adverse, hostile, continuous, and uninterrupted for the applicable statutory period.
The burden here is on the record owner. Once an owner discovers the presence of a potential adverse possessor or is otherwise put on notice of an adverse possession claim, he or she must act to defeat the possessor's claim within the period prescribed by one of three statutes of limitation—or lose title.
The Three-Year Statute
Tex. Civ. Prac. & Rem. Code § 16.024 (Three-Year Statute):
A person [i.e., the original owner] must bring suit to recover real property held by another in peaceable and adverse possession under title or color of title not later than three years after the day the cause of action accrues.
Under this section, the possessor must actually have title (i.e., a deed as part of a regular chain of title) or at least "color of title," which refers to a claim to title that has a reasonable basis but for some legitimate reason does not fit within the usual chain of title. So, the possessor must be able to produce conveyance or title paperwork to support the claim if it is to be successfully asserted under the three-year statute.
The Five-Year Statute
Tex. Civ. Prac. & Rem. Code § 16.025 (Five-Year Statute):
(a) A person [i.e., the original owner] must bring suit not later than five years after the day the cause of action accrues to recover real property held in peaceable and adverse possession by another who:
(1) cultivates, uses, or enjoys the property;
(b) This section does not apply to a claim based on a forged deed or a deed executed under a forged power of attorney.
(2) pays applicable taxes on the property; and
(3) claims the property under a duly registered deed.
This is self-explanatory. Note that under this five-year statute, some sort of deed of record is still required.
The Ten-Year Statute
Tex. Civ. Prac. & Rem. Code § 16.026 (Ten-Year Statute ["Bare Possession Statute"]):
(a) A person must bring suit not later than 10 years after the day the cause of action accrues to recover real property held in peaceable and adverse possession by another who cultivates, uses, or enjoys the property.
(b) Without a title instrument, peaceable and adverse possession is limited in this section to 160 acres, including improvements, unless the number of acres actually enclosed exceeds 160. If the number of enclosed acres exceeds 160 acres, peaceable and adverse possession extends to the real property actually enclosed.
(c) Peaceable possession of real property held under a duly registered deed or other memorandum of title that fixes the boundaries of the possessor's claim extends to the boundaries specified in the instrument.
The 10-year provision is the catch all. A deed or other memorandum of title is not necessary so long as the elements of adverse possession are met. However, such documentation may be useful to establish the boundaries of the claimed tract; otherwise the key to determining boundaries may be that which is fenced in as a "designed enclosure"—not just a "casual fence." Rhodes v. Cahill, 802 S.W.2d 643, 646 (Tex. 1990).
The designed enclosure rule from Rhodes appears in a later case concerning the grazing of cattle. "Under Texas law, use of land for grazing cattle fails to establish adverse possession as a matter of law unless the fence used is a 'designed enclosure' as opposed to 'casual fences'. . . . Unless the claimant establishes he erected the fence with the purpose of enclosing the property at issue, the fence is a casual fence rather than a designed enclosure." And a casual fence is not good enough to win an adverse possession claim. Anderton v. Lane, 439 S.W.3d 514 (Tex.App.—El Paso 2014, pet. denied).
Other Statutes of Limitation
Two other sections, section 16.027 and section 16.028, are less commonly applied. The first provides a 25-year limitation "regardless of whether the person is or has been under a legal disability." The second allows a 25-year limitation based on a title instrument, even if that instrument is void on its face or in fact.
Statutes of limitation do not include any periods of legal disability (minority, insanity, or service in the armed forces) on the part of the original owner.
Statutes of limitation may be tacked or combined by various successive possessors of the property so long as there exists "privity of estate" (a direct legal connection by means of the chain of title) between these persons.
Adverse Possession in the Case of Cotenant Heirs
It makes for an interesting case when a possessor stakes an adverse possession claim against family members in an heirship situation—for example, a son wants to claim the family farm after his parents died without wills, and his siblings show no interest or have long since disappeared. Previously, adverse possession against cotenant heirs was accomplished in the same manner as against any other persons. However, in 2017, sec. 16.0265 was added to the Civil Practice & Remedies Code, mandating a ten-year possession period followed by a five-year waiting period commencing after a cotenant heir files affidavits of heirship and adverse possession. Newspaper notice is also required and a limit of 160 acres is imposed.
Generally, a cotenant (the legal term for co-owner) may not adversely possess against another cotenant unless the claimant clearly repudiates the title and claims to be holding adversely to that title. Dyer v. Cotton, 333 S.W.3d 703 (Tex. App.—Houston [1st Dist.] 2010, no pet.). Moreover, a cotenant claiming adverse possession against another cotenant must affirmatively show that all other cotenants have been unequivocally ousted from the property. Villarreal v. Guerra, 446 S.W.3d 404 (Tex.App.—San Antonio 2014, pet. denied). Accordingly, an affidavit of adverse possession, or a deed based on adverse possession, puts cotenants on notice of an adverse possession claim only if that instrument is recorded prior to the other cotenants acquiring their interest.
Litigation by the Record Owner
What sort of action should the owner take to defeat a claim of adverse possession? The most obvious option is to physically displace the interloper, if that can be accomplished peaceably, or file a suit for forcible detainer. If neither is effective, or if the adverse possessor asserts a title claim, then the owner's remedy is litigation in the form of a trespass to try title action and request for a declaratory judgment.
Litigation by the Adverse Possessor
Alternatively, an adverse possessor may be the one to file suit to establish title. To do so, the possessor must prove (1) a visible appropriation and possession of the land, sufficient to give notice to the record titleholder (2) that is peaceable, (3) under a claim of right hostile to the title holder's claim, and (4) that continues for the duration specified in the applicable statute. What is a "visible appropriation?" The possessor must "visibly appropriate the property as to give notice to any other person that they claim a right to the property." Perkins v. McGehee, 133 S.W.3d 291, 292 (Tex. App.—Forth Worth 2004, no pet.). Many people accomplish this by fencing the property and otherwise asserting clear dominion over it.
Section 16.034 provides that the prevailing party in a suit for possession of real property may receive an award of costs and reasonable attorney's fees.
Judgment Liens against Adversely-Possessed Property
What happens if the land adversely possessed has one or more judgment liens that have attached to it? A San Antonio appeals court has held that the judgment liens are extinguished. "The parties have stipulated that Jones had a valid lien on the two parcels of property, and that he complied with the statutory prerequisites to foreclose his lien. The parties have also stipulated that, to the extent they apply, Harrison and Stephens have complied with the prerequisites of the three and five-year adverse possession statutes. . . . Under the facts of this case, the central issue is whether a limitations title by the adverse possession of the successor of title of the judgment debtor extinguishes a judgment lien. We hold that it does under Tex. Civ. Prac. & Rem. Code § 16.024 (Three year Statute of Limitations), § 16.025 (Five-year Statute of Limitations), and § 16.030. . . . We further hold that limitations commenced to run against judgment lienholder, Jones, from the time of the entry into possession by the respective appellees who purchased from the judgment debtor." Jones v. Harrison & Stephens, 773 S.W.2d 759 (Tex.App.—San Antonio 1989, writ denied).
Creative Approaches: The Affidavit of Adverse Possession
What should an adverse possessor do who believes that one of the above statutes of limitation allows him to claim ownership? The first and best option is to file a trespass to try title action. However, if a lawsuit is not affordable, a second choice is to file an affidavit of adverse possession in the county real property records which contains specific wording asserting the various elements of an adverse possession claim. Such an affidavit acts as a marker that commences notice, thereby providing a fixed point for the running of applicable statutes of limitation. As the affidavit matures over time without opposition it gradually acquires increased credibility.
Note that it is possible to file an affidavit before the applicable statute of limitation has fully run. The affidavit may assert a date when adverse possession commenced (which may be a date years in the past) and state that should current circumstances continue and should the entire limitations period expire, then the claimant will become the fee simple owner.
The dispute over whether or not county clerks have an obligation to accept property executed and acknowledged affidavits of adverse possession for filing was effectively settled by a Texas General Attorney's opinion (numbered KP-0165) issued in 2017. The question was answered in the affirmative, citing Local Government Code sec. 192.001: "The county clerk shall record each deed, mortgage, or other instrument that is required or permitted by law to be recorded." Also cited was Property Code sec. 12.001(1)(a): "An instrument concerning real or personal property [such as an affidavit of adverse possession] may be recorded if it has been acknowledged, sworn to with a proper jurat, or proved according to law." Attorney General Ken Paxton further states in his opinion that "A county clerk may not impose filing requirements beyond those set forth in [Property Code] section 12.001." After all, he reasons, "The mere filing of an affidavit asserting an adverse interest in another's property does not vest the filer with legal title." If county clerks wish to have a remedy for suspicious documents, their recourse lies with Government Code sec. 51.901 (a)(2) which pertains to the filing and recording of documents which the clerk has a reasonable basis to believe in good faith are fraudulent. But clerks cannot discriminate against an entire class of documents per se.
It is a good idea to research title to determine if there are known owners who can be located. Title companies will issue a relatively inexpensive title report or an online service can be used. The title report can provide useful information in drafting the affidavit. If the title report reveals owners of record that can be located, a potential adverse possession claimant may be better advised to contact them and attempt a deal that preserves the existing chain of title. Unfortunately, this will likely involve payment of money for their interests.
If heirs exist (whether they can be found or not), then an affidavit of adverse possession may be combined with an affidavit of heirship—entitled "Affidavit of Heirship and Adverse Possession." The heirship portion of the hybrid affidavit should include a recitation of family circumstances along with a statement of who the heirs are believed to be, in light of Estates Code section 203.001. The adverse possession section would make the usual assertions as to actual and peaceable possession, etc. At least two disinterested witnesses should sign. Three is better.
Clients routinely inquire about payment of back taxes on land they want to adversely possess. "Should we pay the taxes?" they ask. Well, yes; otherwise the taxing authorities will eventually conduct a tax sale and title will be acquired by someone else. Clients also ask "Can you guarantee that if I pay the taxes I won't lose my money?" The answer is of course no. Firstly, lawyers never guarantee anything. Secondly, it is always possible that the true owner of the property will appear and demand possession. If that occurs, then the client has made a gift to that person by paying back taxes.
The affidavit of adverse possession is a creative device that is inexpensive and often effective. The process is not, however, without a measure of risk and uncertainty.
Creating a New Chain of Title
As an additional creative step, the affidavit of adverse possession may be followed by a deed to the property out of the adverse possessor (to a third-party trustee, for instance) and then another deed back into the name of the adverse possessor. The objective is to give the adverse possessor an actual recorded deed in his or her own name, in order to create a new chain of title. Such deeds should contain specific and appropriate language pertinent to adverse possession and the previously recorded affidavit with the ultimate goal of passing muster with a title company down the road. If the ten-year statute has run, one can use special warranty deeds for this purpose; if not, then deeds without warranties should be used. An appropriate indemnity provision should be included to protect the middleman.
This approach is designed to allow the adverse possessor to obtain credibility as his claim to title seasons over a period of time. Since this method does not produce instant results, it is not suited for investors who want to adversely acquire property and then flip it.
Do-it-yourselfers beware. These transactions should be handled only by a capable real estate attorney in order to avoid doing more damage than benefit when it comes to the adverse possession claim. There is an additional caution here: the 84th legislature amended Business & Commerce Code chapter 27 to include real estate transfer fraud as a deceptive trade practice under the DTPA. The amendment also expressly permits prosecution of such fraud—so use of any creative technique to establish a new chain of title must be soundly based on the facts and the law.
Remedies for the Record Owner
What should an owner do who is put on notice that someone else is making a claim of adverse possession? There are a couple of options, but it is important to observe that doing nothing is not one of them, since the statute of limitations will eventually run and the claimant will succeed in acquiring legal title. One possibility is to file an opposing affidavit in the real property records expressly rejecting the adverse possessor's claim; in certain circumstances this may be enough to end the matter. Otherwise, the only safe course of action is for the owner to file a suit known as "trespass to try title."
What Does the Attorney Need from the Client?
Circumstances vary, of course, so the client should be prepared to explain the nature of his or her adverse possession of the subject property. Have they fenced it? Erected a structure? Do they mow and maintain it? Pay taxes on it? The client should also be prepared with a proper legal description of the property (lot and block or metes and bounds). A copy of the last recorded warranty deed is useful in this respect. It does little good to make an adverse possession claim if the boundaries of the property are uncertain. In many cases, the client is best advised to get a survey before proceeding. Finally, if the case involves potential heirs, and the likely strategy will be the filing of a hybrid affidavit, then the client will need to do some research on who the heirs are and where they can be found. Obtaining a title report from a title company is a good idea.
A Note on Illegality
Real estate lawyers are regularly approached by persons who wish to undertake a campaign of asserting adverse possession as to properties (sometimes dozens of them) that they perceive to have been "abandoned." These are often foreclosed houses owned by lenders that are currently sitting idle. Courts have tended to protect the interests of these absentee lenders/now owners.
The take-away is that the statute does not contemplate or condone the use of the adverse possession rules as a business plan for aggressive investors. In fact, such a strategy expressly involves breaking and entering, filing false instruments, slander of title, and fraud. District attorneys in Texas have begun prosecuting these actions as criminal offenses. In the aforementioned AG Opinion, Attorney General Paxton states: "Fraudulent affidavits are criminal and county clerks have a duty to notify property owners when a fraudulent affidavit is filed." Accordingly, affidavits of adverse possession should be used prudently and only in legitimate circumstances.
Information in this article is provided for general educational purposes only and is not offered as legal advice upon which anyone may rely. The law changes. Legal counsel relating to your individual needs and circumstances is advisable before taking any action that has legal consequences. Consult your tax advisor as well since we are not tax practicioners and do not offer tax advice. This firm does not represent you (i.e., no attorney-client relationship is established) unless and until it is retained and expressly agrees in writing to do so.
Copyright © 2018 by David J. Willis. All rights reserved worldwide. Reproduction or re-use of any this material for any purpose without prior written permission and full attribution is strictly prohibited. David J. Willis is board certified in both residential and commercial real estate law by the Texas Board of Legal Specialization. More information is available at his website, http://www.LoneStarLandLaw.com.