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Squatters’ Rights: What Landlords Need To Know

open old door
by Jeff Rohde, posted in Investment Strategy

Did you know that if someone lives in your rental property long enough, they may be able to  gain legal title to the property without paying you a single dollar?

As hard as that might be to believe, the fact is that most states have some form of squatters’ rights laws on the books. Keep reading to learn how to protect your property and various steps you can take if you discover someone occupying your property without a contract in place.

What Is Squatting?

Squatting occurs when someone occupies your property without your permission. For landlords, that means a tenant lives in your rental property without paying any rent.

Under the legal doctrine of adverse possession, a person who enters a property unlawfully can eventually become the legal owner without paying compensation. In some circumstances, legal title can transfer after the person occupies your property for a specific time, established under various state laws.

It’s often essential that you take specific legal steps to remove a squatter from your rental property as soon as you discover their presence, but the process isn’t always easy or obvious. If the squatter has occupied the property beyond the term of an expired lease agreement, it’s possible that traditional landlord-tenant laws won’t apply. 

One might think that unlawful occupants are easy to remove because there’s no contract in place, but that’s not always true.

Why Do Squatters Have Rights?

The fact that the law provides for squatters rights at all might seem unfair. In many instances, these types of provisions are intended to balance private property interests against the public’s interests of ensuring that property is maintained and put to beneficial use.

According to Anderson Advisors, squatter’s rights are created largely to protect the occupants of a property from being removed by force without legal due process. They also work to reduce waste by incentivizing the rightful property owner to stay current on property taxes and make productive use of their property. In practice, squatter’s rights can also provide a path to legal ownership by the squatter when certain conditions are met over an extended period of time. 

How Squatters Claim Rental Property

If a person can demonstrate hostile, adverse, open, notorious, and/or exclusive continuous occupation over a specified period of time, many states and local jurisdictions will confer legal rights on the squatter. In these situations, the rightful property owner will often be required to proceed with a legal eviction process to remove the squatter. According to the legal resource website, there are generally four legal requirements for a squatter to make an adverse possession claim to your property:

Hostile occupation

The possession or occupation of the property must be considered “hostile,” or an invasion of or contrary to the owner’s rights. If the owner consents, the occupation is not regarded as hostile.   

Open and notorious occupation

Open and notorious means that the person is not hiding their occupation of the rental property. They may even introduce themselves to the neighbors and are not secretive about being on the site.

Actual occupation

Actual possession means the person is physically occupying your property. In most instances, someone who simply leaves their belongings or possessions on the property, but does not physically occupy, cannot establish actual possession.

Exclusive and Continuous Occupation

Exclusive and continuous means the person occupies your home for an extended period without interruption. They can’t leave for months and then return, and they can’t pretend to be the landlord and lease your home to somebody else. The amount of time required to be considered “continuous” varies from state to state, and generally runs from a minimum of seven years all the way up to twenty years of continuous possession.

Squatting and Trespassing: What’s the Difference?

To make matters more confusing, before beginning eviction or removal procedures, you may need to figure out if someone is “trespassing” or “squatting” on your property because the rules for removing someone can be different in each situation.

Both squatters and trespassers occupy property without permission. Whether an individual is squatting or trespassing depends on their intent in occupying the property and the length of time they are there.

For example, a trespasser may enter a vacant home to steal from or vandalize the property without intending to become a resident. If you learn of a trespasser, it usually just takes a phone call to the local police department to have the trespasser removed from your property.

On the other hand, squatters generally intend to reside on the rental property. Sometimes, they scope out a neighborhood, looking for an empty home to move into. Occasionally, squatters may even draw up a phony lease agreement to turn on utilities or convince authorities that they have the right to occupy the home.

After the squatter has lived in your property openly and for an extended period, they may try to claim ownership of your home. To remove a squatter, you must first file a police report and might have to proceed through eviction. If the property is unsafe, uninhabitable, or not up to code, you may be able to expedite the process. 

How to Get Rid of a Squatter

shadow behind private property sign

Squatting often occurs in properties left vacant for most of the year, such as second homes, property purchased by an out-of-state investor who hasn’t seen the house in years, or property inherited by someone who has no interest in owning real estate.

You can typically begin eviction once you determine that a person is occupying your property without your permission. Although eviction rules vary based on landlord-tenant laws, the following are general steps to follow when doing a residential eviction.

Review Landlord-Tenant Laws

Read the landlord-tenant laws for your state and jurisdiction. Because eviction laws can be complicated, many landlords hire a real estate attorney specializing in residential evictions. An attorney can guide you on the most efficient course for removing the unauthorized occupant.

Cash for Keys Offer

Residential evictions can easily cost thousands of dollars and take months to complete from start to finish, depending on the state your rental property is located in. Offering a cash for keys incentive to encourage an unlawful occupant to leave may save you money in the long run compared to expensive legal fees and court costs.

If the person agrees to accept your incentive to leave, consider having your attorney draw up a legal document that can be used in court if the person fails to honor the deal.

Serve a Notice of Eviction

A third party, such as a process server, can be used to serve the necessary written notice of eviction. Landlord-tenant laws often provide the occupant with a few days to willingly leave after being served. If they don’t leave, the next step is to file the eviction with the court.

You’ll often need to prepare and file the necessary pleadings, pay a filing fee, and provide the court with proof that all requisite documents were served correctly. After that, a hearing date for your eviction may be scheduled.

Proceed with Eviction

On the day of the hearing, the court will likely ask for evidence indicating when the unlawful occupant was first discovered on your property, the approximate length of time the squatter has been occupying your property, and proof that the squatter was adequately served with an eviction notice and other court documents.

Remove the Squatter

final notice of eviction posted on door

The court hopefully rules in your favor if the person hasn’t occupied your property long enough to gain legal title. If you win an eviction lawsuit, you will receive a court order, 

often called a Writ of Restitution, that gives you the legal right to remove the unlawful occupant. The writ is sent to the local constable or sheriff, who will assign an authorized person to accompany you to the property, and physically effectuate the eviction from the premises, if necessary.

Take Back Your Property

If the squatter has left any possessions behind, some states require you to serve another notice that they need to collect their belongings. In most cases, the attorney representing you in the eviction proceedings will include this reque

st as part of the eviction process. After you take your property back, you can make any needed repairs to make the home rent-ready for a new tenant, or to put it on the market for sale.

Do you have a squatter?

As the saying goes, an ounce of prevention is worth a pound of cure. To help prevent squatting from occurring in the first place, property owners can conduct routine rental property inspections, make sure vacant property is secure, and physically inspect the home as part of the standard due diligence when buying a property.

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