It's the Law: How to handle adverse possession between tenants - Free Lance News : Business

It's the Law: How to handle adverse possession between tenants

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Posted: Thursday, March 15, 2012 11:16 am

Adverse possession is a process by which one person can try to obtain title to another person’s property by meeting certain statutory requirements, which include occupying the rightful owner’s property, the rightful owner knowing of such improper occupancy and the adverse possessor claiming that the property is his own, among other requirements. While it is difficult to successfully obtain property by adverse possession, it is even more challenging when one tenant in common tries to obtain ownership of the entire property from another tenant in common. This was the situation addressed in a recent California case entitled Hacienda Ranch Homes v. Superior Court.

Hacienda Ranch Homes (“Hacienda”) owned an undivided 50 percent interest in a 5-acre tract of agricultural land in Tracy, of which Stanley and Geurtje Boersma (“Boersma”) owned the other 50 percent interest. Hacienda transferred a 24.5 percent interest to Helen Tyler, who failed to pay the real property taxes on her interest. Her 24.5 percent interest ended up in a tax-defaulted sale by San Joaquin County, and Roger and Annette Elissagaray (“Ellissagaray”) purchased the 24.5 percent interest in 1999. San Joaquin County recorded a tax deed granting to the Ellissagarays an undivided 24.5 percent interest in the property.

The Elissagarays then disced the entire property two or three times a year for purposes of controlling the weeds, at some point posted a “For Sale” sign near the property (but not on the property) and they introduced themselves as the owners of the property at a meeting. The Elissagarays did not take any further actions with respect to the property, and Hacienda and Boersma never did anything with the property.

In 2005, the Elissagarays filed a lawsuit against Hacienda and Boersma claiming that the Elissagarays had acquired a 100 percent ownership interest in the entire 5-acre parcel by means of adverse possession. California Code of Civil Procedure Section 321, et seq. establishes the elements of a claim for adverse possession, which are: (i) possession must be by actual occupation under such circumstances as to constitute reasonable notice to the owner; (ii) such possession must be hostile to the owner’s title; (iii) the adverse possessor must claim the property as his own under either color of title or claim of right; (iv) possession must be continuous and uninterrupted for five years; and (v) the adverse possessor must pay all the real property taxes levied and assessed against the property during the five-year period.

Hacienda filed a motion for summary judgment, asking that the trial court dismiss the case because the Elissagarays had failed to properly meet all the adverse possession requirements. Hacienda specifically focused on the third requirement in that the San Joaquin County deed only gave the Elissagarays a 24.5 percent interest in the property; therefore, they did not have color of title to a 100 percent interest in the property. Furthermore, Hacienda argued that the Elissagarays did not have a claim of right to the entire property because the Elissagarays’ actions were so minimal on the property that they could not rightfully claim that they owned the entire property. The trial court agreed with Hacienda that the Elissagarays did not have a valid color of title argument. However, the trial court denied Hacienda’s motion for summary judgment under the claim of right argument, stating that “the absence of any statutory or case law on point on whether discing is a form of cultivation or improvement (is) a triable issue of material fact.” For this reason, the trial court did not grant Hacienda’s motion for summary judgment to dismiss the lawsuit.

Hacienda appealed the trial court’s ruling to the California Appellate Court, and the Appellate Court overturned the trial court’s ruling and ruled that the summary judgment motion should be granted. The Appellate Court focused more on the first and second elements of adverse possession than on the claim of right argument. The Appellate Court cited various cases establishing that each tenant in common has a right to occupy the whole of the property, and that one tenant in common’s possession of the property is deemed to be possession of the property by all tenants in common. Furthermore, a tenant in common may assume that another tenant in common’s exclusive possession of the property is being done for the benefit of all the tenants in common and not to adversely possess against the other tenants in common. The Appellate Court also cited a case which stated that:

“(T)he occupying tenant must bring home or impart notice to the tenants out of possession, by acts of ownership of the most open, notorious and unequivocal character, that he intends to oust the latter of its interest in the common property. Such evidence must be stronger than that which would be required to establish a title by adverse possession in a stranger. In short, one tenant in common cannot by mere exclusive possession acquire the title of his co-tenant.”

In applying these principles, the Appellate Court stated that discing the property two or three times a year, posting a “For Sale” sign near the property and introducing themselves as the property’s owners are not adequate or sufficient to meet the “type of open, notorious and unequivocal ouster of co-tenants required to establish adverse possession under a claim of right.” The Appellate Court determined that these actions were so minimal that the other co-tenants could not have reasonably known that the Elissagarays were intending to dispossess Hacienda and Boersma of their ownership of the property. For these reasons, the Appellate Court ruled that the Elissagarays did not meet the requirements of adverse possession and therefore that Hacienda’s motion for summary judgment should be granted and the case should be dismissed.

This case illustrates that co-tenants of property should have good communication amongst themselves as to the use of the property and any future plans for the property. If a tenant in common is going to make an adverse possession claim against the other tenants in common, then that tenant in common will have a higher burden of proof against his or her fellow tenants in common as opposed to an adverse possession claim against a stranger. It is also a good idea to have a written tenancy in common agreement between all the owners that details the management, operation and financing of the property in addition to detailing each owner’s voting rights and rights of first refusal.

This column is the work product of L+G, LLP, which has offices in Hollister and Salinas. Patrick Casey is an attorney with L+G, LLP. You may contact the author at (888) 757-2444 or patrick@lomgil.com. Mail your questions to Patrick Casey, It’s the Law, c/o The Pinnacle, 350 Sixth St, Ste. 102., Hollister, CA 95023.

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