patrick.net

A few questions/comments about your master plan:
If you still have a mortgage on a property that the bank hasn't foreclosed on, are you sure you are possessing it adversely? It seems the bank is just giving you a temporary free pass, not that you are adversely possessing it.

Something to keep in mind from another article:
When a squatter gets into the position where adverse possession becomes a possibility, the greatest hurdle is often the payment of taxes, mainly because the landlord (in this case bank) can pay the taxes on the 364th day of the 5th year and defeat the squatter's claim to adverse possession (which is exactly what happened at a San Francisco squat in the 1970s).

I see how the banks can actually use this to their advantage. As Camping has said, the bank will just use you as a sucker to pay the property taxes and bills for 4 years and come in to intercept as Camping has said, the 364th day of the 5th year and pay the property taxes. That will have ruined your efforts for the past 4 years. It just doesn't seem like a safe thing to do. If it was really that easy, there will be many people that will start to salvage homes like this.

I don't see how the ability of the bank to come in at the last moment is much of a problem. If you pay the property tax and utilities for five years even if you aren't able to claim the house free and clear under adverse possession, you will have lived in a house for five years for much less than the cost of renting it.

You're right that bank attorneys know about adverse possession. So does every other attorney in the country. They teach it during the first year of law school.

Hey, look, the state already provides resources on it. Even says how to STOP adverse possession claims.

http://www.dot.ca.gov/hq/row/landsurveys/Study_material/California-Adverse-Possession.pdf

gavinIn,

> you will have lived in a house for five years for much less than the cost of renting it.

That seems like a big gamble. You'd live there for free if you didn't pay the property tax at all.

gavinln says

I don’t see how the ability of the bank to come in at the last moment is much of a problem. If you pay the property tax and utilities for five years even if you aren’t able to claim the house free and clear under adverse possession, you will have lived in a house for five years for much less than the cost of renting it.

Well, it's a problem if you want to take title to the property. You're right, if you just want to live in the house for less, then this could work, but as justme pointed out, why pay anything if that's your goal?

justme, camping: You got to choose your enemies carefully. If you stop paying your mortgage you only have the bank after you. If you stop paying your property tax, you now have the state after you.

gavinln says

justme, camping: You got to choose your enemies carefully. If you stop paying your mortgage you only have the bank after you. If you stop paying your property tax, you now have the state after you.

That depends on whether the mortgage company is paying your property taxes. You're right though, if no one was paying them, the state could come after you.

With what's been going on lately, people aren't paying anything (mortgage or prop tax), and neither the bank nor the state is taking the house, so I don't know who is paying what.

LarryP says

Maybe I should write a book on how to do this…..

Too late:

http://www.allbookstores.com/book/9781847663726/Adverse_Possession.html

So, let me get this right, you think the bank will come in at the last second and pay the back property taxes?

Well, that's true they could. However, you seem to think that the banks have their act together. If they did, they wouldn't wait so long to foreclose.

Also, five years of back property taxes is going to add up! For a 500,000 house, that's about $37,500

If the home "squatter" pays the taxes as they go, it will further strengthen their claim. Also, the bank won't be able to track when the five year mark is up. :) The bank is the one that gets notice that the taxes are due from the county. (BTW: This has NOTHING to do with the state people, it's a county govt. tax)

So, if you pay your property taxes, the bank will probably lose track that they haven't paid the taxes.

It doesn't matter if the bank pays the taxes, as long as you do too. The state will gladly take 2x the revenue with no complaints.

The criteria for adverse possession is that you - or someone - occupies the house "openly and notoriously", and that YOU pay the prop taxes.

I believe there's also something in there about casting a cloud on the title (aka - getting a wino to sign a quitclaim deed).

A friend of mine has successfully acquired a few houses this way - albeit in dicey neighborhoods - this was before the boom. You could probably do this in much nicer neighborhoods today.

Brixmitch, you're just wrong. Until the 5 years is completely up, the title owner has every right to the property. If they came in on the last day and said, "oh, you're on my property, that's ok," your adverse possession claim is gone, since it is no longer adverse. Paying taxes on the last day would do the same thing. You seem to be forgetting about the "adverse" in "adverse possession."

Larry, you're logic is a little off. #1 the banks aren't foreclosing because they are being paid and pushed by the government not to. #2 if you had to pay $40k in back taxes to retain possession of a $500k asset, wouldn't you do it or would you just piss away the $500k and get nothing?

If you guys want to try it, go ahead. When you have success, post it, and I'll congratulate you.

Adverse position requires that the possession be adverse to the owner of record. If the bank has not foreclosed, the would-be adverse possessor is still the owner of record. This simply will not work and is bad advice.

Adverse position requires that the possession be adverse to the owner of record. If the bank has not foreclosed, the would-be adverse possessor is still the owner of record. This simply will not work and is bad advice.

steve says

Adverse position requires that the possession be adverse to the owner of record. If the bank has not foreclosed, the would-be adverse possessor is still the owner of record. This simply will not work and is bad advice.

Right. Thanks. That was one of my questions above.

I will also add:
(1) Paying taxes does not help you become an adverse possessor so that is a waste of money. In fact, in Illinois, per a a court decision, AP can actually wipe out tax liens (i.e., the adverse possessor can obtain clean title without paying off any mortgages OR tax liens). In other words, why pay the taxes each year if you can just wipe them out?
(2) Even if the bank foreclosed and took title but you remained in the house, all the bank would have to do to defeat your AP is give you permission to stay in the house for 1 day during that 5 year period, thus destroying the 5 year streak of adversity you need to prove.
BOTTOM LINE: If you can stay in a house rent/mortgage free, go for it for as long as you can. But don't make any plans around the idea that you will own it someday through AP.

What are the tax implications?

I have completed two adverse possessions. It does work, you just have to do it correctly.

As far as the owner of record, who is the owner? The home owner or the bank?

In any event, you can always collaborate with someone else. You can "swap" your house with someone else, who is in the same position.

I think the courts would grant a clean title to a homeowner, who's been in foreclosure for five years. Some remedy would be considered by the courts.

Tax implications?

That doesn't make sense. What do you mean "tax implications"?

You aren't going to have interest payments to deduct. So your tax "bill" is going to be higher if you can't write off your interest on your mortgage.

However, WHO CARES. You don't make mortgage payments, so you save that money.

Are you referring to getting hit with a big tax bill cause you got a house without a mortgage or something?

None.

Unless you sell the house, then maybe your taxed, but aren't you able to sell your primary residence up to $500,000 tax free?

Larry

@larrypatrickmaloney: How can you have "completed two adverse possessions," as you say, and not know whether the bank or the home owner is the owner of the record?

larrypatrickmaloney says

I have completed two adverse possessions. It does work, you just have to do it correctly.
As far as the owner of record, who is the owner? The home owner or the bank?
In any event, you can always collaborate with someone else. You can “swap” your house with someone else, who is in the same position.
I think the courts would grant a clean title to a homeowner, who’s been in foreclosure for five years. Some remedy would be considered by the courts.

Maybe you can explain in detail what you did then because from your posts you don't really seem to understand what adverse possession is, so it seems unlikely that you would be able to pull it off.

If Larry can't answer his own question about who the owner of record is, there is zero chance he pulled off an adverse possession. The owner of record is the person who was deeded the house last. The bank is only a mortgagee unless and until it forecloses (not when it sends a notice of foreclosure but when it actually forecloses). Bottom line, talk to a lawyer and get some real advice before spending 5 years of your life trying to pull off something someone mentioned on a message board.

larryp says

Now, I debated about writing this publicly, because I want to jealously guard this “open secret” to my advantage.

Dear Penthouse:
I never thought this could happen to me, but...

ellie--

Very nice. that made me laugh.