What is Adverse Possession? How can I obtain title to real estate?

In a nutshell adverse possession is a process where a person or an investor can obtain the ownership or title of real property from another person because the owner has abandoned the property. This is done by simply taking possession of that property in the manner prescribed by state law.

In doing so, you can, literally acquire ownership or title of the real property for just paying the back delinquent real estate taxes and the cost to file a quiet title lawsuit establishing that you obtained title to the property through adverse possession. In other words, you can take title of valuable property for a incredible discount.

The Law of Adverse Possession

The laws governing adverse possession is local state (or, in Canada, territorial law); consequently an Abandoned property investor must look into the specific laws of a specific state or Canadian territory where the real property is located. Since the laws are different dramatically from jurisdiction to jurisdiction and can often be confusing, anyone wishing to take title to real property through adverse possession should contact a knowledgeable attorney before attempting to do so.

In order for you to begin understanding the requirements of Adverse Possession let’s look at a specific example. Below is a closer look at th California Adverse Possession law. We will use this law to identify and explain some of the more common terms used in Adverse Possession.

California Adverse Possession Law

Briefly, California state law states that Real Estate investors wanting to obtain title to another person’s real property through adverse possession MUST satisfy all the following Requirements:

1.That the Abandoned property investor’s possession was held under either (1) a claim of right or (2) under color of title:

2.That the Abandoned property investor’s possession was actual, open and notorious;

3.That the Abandoned property investor’s possession was hostile, adverse an exclusive;

4.That the Abandoned property investor’s possession was continuous and uninterrupted for a period of five years;

5.That the Abandoned property investor paid th real property taxes during that five-year period.

Possession must be held under either (1) a claim of right or (2) under color of title.

The California statutes governing adverse possession and as well as the statutes of most other states make a distinction between claiming adverse possession based upon a “claim of title founded upon a written instrument or judgment or decree” (often referred to as a claim under color title) and claiming adverse possession based upon “a claim of title exclusive of any other right, but not founded upon a written instrument, judgement, or decree” (often referred to as a claim as either a claim of right, see California Code of civil procedures Section 322 and 323. As to such claim under claim o right, see Code of Civil Procedures Section 324 and 325.

Basically a claim of adverse possession based upon color color of title is one where the claimant(Abandoned Property Investor) took in good faith possession under a deed (or some other written instrument) or judicial decree that appeared to transfer good title, but was defective. For example, a tax sale investor might take adverse possession through color of title for real estate bought at a California county tax-defaulted sale where the sale was conducted improperly and, consequently, the deed was void.

“Claim of Right” or “Claim of Title”

Abandoned property investors attempting to take title to real estate through the doctrine of adverse possession are generally more interested in taking such title through “claim of right” or “claim of title”. Under this doctrine, an investor merely needs to take actual possession of the property and hold that possession as required by appropriate jurisdictional law.

As might be expected, the requirements to establish adverse possession under a claim of right are (under California law and under the law of most all other states) are more strenuous than those associated with claiming under color of title.

In order to be accurate as the specific requirements for a claim of right refer to the specific state statutes. Again, to be safe consult with a knowledgeable attorney in the county where the property is located.

Possession must be actual

As will be seen below, an abandoned property investor claiming possession under the doctrine of adverse possession does not have to personally occupy or live on the real estate to be in actual possession of the property. However, actually living on the real estate is probably the strongest and clearest evidence that possession is actual.

Possession by tenant as actual possession

Real property can be occupied, lived on, and actually possessed by a tenant under a tenancy agreement. Take, for instance, if you look at the California appellate case of Traeger v. Friedman (1947) 79 CA 2d 151. In that case, the adverse possession claimant took possession of a apartment building through tenants and, then, managed and rented for five years. She evn paid the real property taxes out of the rent. The California court held that she had met the actual possession requirement needed to perfect title under adverce possession.

Possession is deemed actual if lands is “protected by a substantial enclosure”, “usually cultivated or improved”

If the adverse possession is claimed based on a claim of right, then California Code of Civil Procedure Sections 324 and 325 apply.

A abandoned property investor’s possession is deemed to be in actual, open and notorious possession of specific real property under a claim of right when that person has either

1.”protected” that property “by a substantial inclosure” OR

2.That person has “usually cultivated” OR

3.Has “improved” tht property.

If the real property being taken through adverse possession is a lot and acreage and cannot be actually possessed (i.e., lived on) then that property must be either “protected…by a substantial inclosure”, “usually cultivated”, or “usually improved”.

If the property is protected by a substantial inclosure, then the inclosure must be “substantial” enough to give the true owner notice of the investor’s Claim of adverse possession during the entire prescriptive period. Older Cases hold that the inclosure must be substantial enough and remain so throughout the prescriptive period of five years and protect all sides of the property claimed from intrusion by cattle or other animals. If the inclosure is so damaged as not to be able to protect all sides of the property from such intrusion, then the Abandoned property investor or claimant must promptly repair that damage inclosure or risk being found by the court to have not met this requirement.

Meeting ANY one of the three alternative, meets the actual possession requirements for adverse possession even though the Abandoned property investor or claimant does not live on the property.

Additionally, California cases have held that although “grazing” or “pasturage” is not mentioned in the Code of Civil Procedure Section 325 reproduced above, it is a method whereby an investor can take actual possession.

Possession Must Be Open And Notorious

Basically, an owner of real estate will not lose that real estate through the doctrine of adverse possession unless the manner in which the investor holds actual possession would provide reasonable notice of that possession if the owner inspected the property. Repairs and improvements made to houses such as painting the ouside of the house, keeping up the outside ground, etc. are examples of such actions.

However, an owner can lose title to real estate through adverse possession even through he or she is never actually aware of the possession because the owner never visited the real estate to discover the improvements made by the abandoned property investor.

Possession Was Hostile, Adverse And Exclusive.

Basically, if the abandoned property investor or claimant is in possession under color of title, then that possession is deemed to be adverse and hostile to the true owner and it is not necessary to offer any further proof.

However if the Abandoned property investor or claimant is in possession under claim of title, then the claimant must prove that the possession was hostile and adverse. The word “hostile” does not mean that the possession was “overtly antagonistic” to the owner; it means simply that such possession is “inconsistent” with that of the true owner.)

It must be shown that the possession was in violation of the true owner’s property rights and that it should give rise in the owner a reason to begin an action to terminate the Abandoned property investor or claimant’s possession or use.

Possession of the property with the owner’s permission is not hostile or adverse. see California Civil Code Section 813 which provides a better legal explanation of this process.

Basically what the California Civil Code Section 813 means that the owner of the property can give permission for the use of that property by the general public or specific individuals. The statute further states that: “In the event of use by other than the general public, any such notices, to be effective, shall also be served by registered mail on the user.

The claimant’s use must also be exclusive, use of that property by the legal owner or any other person except the claimant or abandoned property investor or a tenant of the claimant or abandoned property investor holding possession on behalf of that person will probably defeat a claim of title through adverse possession.

Possession Was Continuous And Uninterrupted For Five Years.

This requirement can be found in Civil Code Section 1007 when read together with Code of Civil Procedure Sections 318, 319, 321, 322, and 325. Most specifically, Code of Civil procedure Sections 325 provides:

“provided, however, that in no case shall adverse possession be considered established under the provisions of any section or sections of this code, unless it shall be shown that the land has been occupied and claimed for the period of five years continuosly, and the party or persons, their predecessors and grantor’s, have paid all the taxes, state, county, or municipal, which have been levied and assessed upon such land.”

The requirement does not mean, however, that the investor must be physically on the land every day for five years. For instance, if actual possession of a home or other rental real estate is held by tenants on behalf of the adverse possessor or abandoned property investor, then ordinary vacancies will not disrupt the continuity of the possession.

So, if an investor were to take possession of rental property, for example, and there were normal vacancies that occur, these vacancies would not be considered a violation if the five year occupancy requirement. It also means that the investor does not have to live on the property to make this claim. That means you can claim adverse possession at multiple properties as long as the property is safe and liveable for tenants. That means a positive cash flow while waiting in the prescribed period and also without your physical stay at your property.

Claimant Paid The Real Property Taxes During That Five Year Period.

See Code of Civil Procedure Section 325 which governs this requirement

The Abandoned property investor or claimant must prove that he or she has paid all taxes that have been levied and assessed against the real property claimed during the entire five year period. A failure to pay taxes assessed for any one year will defeat a claim for adverse possession. Then the claimant must also pay any delinquent taxes outstanding for years prior to the start of the claim for adverse possession. For more details please refer to the case of Los Angeles v. Coffey (1963) 243 CA 2d 121,125.

Under the law of the state of California, if a Abandoned property investor meets all the requirements of the law of adverse possession under claim of title, then that person becomes the true legal owner of the real estate that has been abandoned. If the legal title of the real property was held by the former owner with no outstanding liens that superceeds the tax lien, then the investor will have acquired the real estate for, basically, just five or more years worth of back delinquent real property taxes or for just a small investment.

So, What Should A Abandoned Real Property Investor Look For?

The two most important principles of the law of adverse possession is that a Abandoned real property investor wants to see are the following:

1.The ability to take adverse possession under Claim of right or claim of title as opposed to color of title and

2.A relatively short prescriptive period. The period of time the Abandoned property investor must adversely possess the real property before that investor can obtain title to the real property.

You are probably asking yourself, Why?

Because in the state of California, the period or prescriptive period is five years based upon the California Code of Civil Procedure. However in some states the period can last from 10, 15 or 20 years until you get title through adverse possession.

Source by Josue Zengotita

Investing in residential homes, condos, apartment buildings or whatever you'd like to do within real estate, there are several creative payment methods. My favorite just happens to be SUBJECT TO, as it does not get any better. Where else can you purchase your dream home and five others, without ever tapping your own credit, assuming you have good credit and closing on all five within a matter of days. So the advantages and disadvantages of my favorite method below.

Advantages

1. Speed ​​& Time: The number one advantage to subject to deals is that they are just SO DARN FAST TO close. With a traditional home buying process you have to wait anywhere from 15-60days before you'll ever get qualified for a mortgage or hard-money loan, let alone find the contract that meets your needs and buying power. With a subject to, you are simply limited in the time that it takes you to find a motivated seller with a deal of investment.

2. No money down – In some cases of finding the best deals, sellers may often times pay you to purchase their house. That's right, its true when you hear people talk about no money down deals. The way this happens is when the market value and loan value (LTV) are reliably equal. When that happens the sellers homes are "Upside down" with little to no equity to cover the closing costs. In a typical buyers market the sellers HAVE .. let me say that again HAVE come up with closing assistance, which at a minimum should cover your area's, transfer and recordation taxes. When this happens, they pay you and you might even walk away with cash in hand, if you are a good negotiator. Now, just because you can get closing assistance for no-money down deals, if a house and area are great, you might take the risk and cover the cost. Me, never pass up free money if a seller can and is willing to assist.

3. Got bad credit – WHO CARES: With subject to deals, you get the best of both worlds, the property you want and none of the credit burden. If you've had a couple of bad marks, filed for bankruptcy, had a divorce or for whatever reason you have less the superb credit, it does not matter. Acquiring properties subject to the existing financing are excellent for investment properties or your personal residence. Now, that being said, if the cause of your credit challenges are you inability to pay on time or just plain forgettable then we advise that you go out and get financial planning assistance. That being said your credit will not stop you from acquiring an investment property.

4. Take over existing payments – If you are lucky and smart, you'll find great deals with motivated sellers that secured homes with OUTSTANDING interest rates and VERY LOW payments. Once you get those low payments and get a home under contract through closing, now you get to take over the current mortgage payments but since you are smart, you'll never pay them, as your TENANTS will pay the monthly mortgage payments for you, plus a hefty increase to generate you a POSITIVE monthly cash flow. Unless you have an aching for pain, DO NOT take over payments if you can not at a minimum get a buyer / buyer to cover the total amount, otherwise you will begin to lose money immediately.

5. Assign or not to Assign – Now, since you were smart and secured the deal, you can either purchase it yourself and play landlord to create generational wealth or you can wholesale (or some investors refer to this an option the property to another investor ) for a quick cash fee. This CASH is yours with NO SERSS attached or ownership in the property. The new investor will cover the rest, closing cost and more.

Disadvantages

Well, like with most things in life, using the Subject To method, has a few challenges too. Here are the top 2 challenges, but I can certainly list a ton more but you do not want to spend your weekend reading this article.

1. Integrity, Honesty and Ethics – When you begin to talk to motivated sellers or buyers / investors, you'll have deal with one thing … EARNING THEIR TRUST. No matter how motivated the seller is they are not just buying your good lucks, the sellers are trusting that you will honor your word, pay the mortgage and of course buy their house. The disadvantage is not all investors are trustworthy and ruin it for the folks that are true investors and NOT out to take advantage of people. Not only that, but some of us need help and training in the honesty department.

2. Ugly mortgages – Heard of ARMS or Negative AM ??? Yikes. For some of us, we do not find out that mortgages are bad until we've spent too much time in the process. Change your process number one, but STAY AWAY from ARMS !!!

Source by E Barley

One of the questions I get asked a lot from owners and potential owners is about our lease. We have a lease we’ve been using for over 15 years and have been constantly improving and fine tuning it to protect our owners. We have used our lease for over 4,000 lease signings over this time period. I get asked about the difference between our lease and why it is so “pro owner” versus pro tenant. Here are a couple of reasons why our lease is “pro owner” and why it will benefit you to use our lease as opposed to another lease.

All Persons Over 18 Must Sign the Lease

We require all persons over the age of 18 to sign the lease. Seems simple right? But you would be surprised how many property management companies do not require it. The reason we require all persons over 18 to sign the lease is if we must evict the tenants and all parties over 18 have not signed that lease, we have a problem. We can evict the parties that have signed the lease, but it is hard to evict people that have not signed the lease if they are 18 or older.

Tenants will come to us and say my spouse or partner does not work so I don’t want them on the lease. This is not a good policy and do not allow this to happen. Or they may come to you and say my partner or spouse has a very poor credit score so I don’t want them on the lease. Again, we want all parties over 18 years old to sign the lease so we know exactly who’s living in the property and if we must do an eviction, we can get that done.

Automatic Rent Increase after the Initial Term Ends

Within our lease is a clause that when the initial term is over in one year or two years, the rent goes up automatically 10% if they want to go month-to-month. This incentivizes the tenants to either accept the 10% premium if they want the flexibility of month-to-month or negotiate a new one or two-year lease. This new lease will probably increase the rent by 3 to 5%, which is a much more reasonable increase than a 10% increase. And that way we’ve locked them in for another year, or maybe two years, and this benefits the owner. But again, the tenant does have the flexibility but the 10% is already pre-authorized.

Waive Their “Notice to Quit” Rights

In the State of Pennsylvania, and maybe other states, the tenant has what is called a 10-day “Notice to Quit” right. If we need to do an eviction, we must give the tenant 10 days’ notice to tell them we are about to evict them. In our lease, we make the tenants waive that right, so they have signed that right away, and we can begin eviction proceedings right away. We could evict a tenant on the first day of the month. I am not saying we do that, but we have the right to do that because we require our tenants to waive that 10-day Notice to Quit right.

Tenants Must Initial Several Sections of the Lease

Tenants must initial certain sections of our lease. There are areas of the lease that are very important including the Notice -of Quit we spoke about in the last paragraph. Another important section is Renter’s Insurance, so we make the tenants initial these sections. This way the tenant cannot claim later that they were not aware because we make them initial each of these important sections in the lease.

Tenants Must Sign Several Addendums Designed to Protect the Owner

Tenants are required to sign several addendums including Lead Paint, Security Deposit Escrow, Rules and Regulations and several other addendums. These addendums are designed to protect the owner so it’s very clear what’s going to happen at the end of the lease or under other various scenarios. So we make sure that these addendums are signed to protect the owner.

Our Lease has been Reviewed by 100’s of Judges and Attorneys over the Last 10 Years

Del Val has probably signed 4000 to 5000 leases over the last 15 years. As part of this process our lease has been reviewed by hundreds of attorneys. We have also been in front of hundreds of Judges during eviction hearings. As result we have refined and improved our lease based upon this feedback. Our lease is well tested and any weaknesses have long since been removed.

We Include the “Extra” Paperwork that is Required in Philadelphia

The City of Philadelphia requires a lot of extra paperwork that is not required outside of Philadelphia. So, it is important that we get those documents signed at the time that the tenant moves in. If we do not get these documents signed and go to evict down the road we could potentially have a hard time doing an eviction. That’s not the position we want our owners to be in so we want to make sure all the paperwork is done properly.

Source by Mike Lautensack

Selling inherited property & how to probate a will can be a pain, if you are not familiar with the steps involved in the probate process can be a pain that you do not wish to keep can be a pain if you do not understand the probate process or how to probate a will.

What Is Probate

Probate is the practice of transferring legal title to estate from someone who has passed away to that individual’s heirs or beneficiaries. The steps are managed by the legal system and can consist of paying taxes or debts that are outstanding, confirming the assets, determining if the will is valid, and settling conflicts about who will be receiving and disputes over who’s inheriting and allocating the possessions.

The official term for this course of action is testate proceedings. Take the probate process as guidelines of the proper reassignment of a dwelling.

How To Probate A Will In 7 Easy Steps

1) You’ll have to locate the will. You may find this to be a simple task or extremely difficult. The will can be any where as in folder in the bureau, a desk drawer, security box at the bank, attorney’s file in his office, secret wall home safe, a close old friends house.

2) If you are not sure if there is property involved you must find out if the person who died owned real property which is anything that is part of the ground like a house or even the land. Anything else is that is not real property is just personal property.

3) Investigate where your state probates wills. This will differ from state to state but some states have probate courts while others don’t. If you find out there’s a probate court, pay them a visit for more info. A certain percentage of states use the Circuit Court.

4) Research thoroughly the assets by the deceased individual. Immediately make arrangement to get all mail forwarded to your home so you can find out about any mortgage loans outstanding, personal vehicle payments, retirement updates and other crucial paper work. Have the mail redirected to your house so you are alerted to mortgages, car payments, retirement updates, and other important documents.

5) If the deceased individual did not specify an executor to his attorney, request the appointment of administrator. The individual who has legal responsibility to the deceased assets is the executor or administrator.

6) Call the Probate Court or Circuit Court & make an appointment in the correct location. Make sure you get together everything you have to bring the court, take the assets list and estimated values, the will and deceased death.

7) Research where to get free legal advice like from clerk at the courthouse, or a probate attorney for fee

Alerting creditors and the public

In some states, they require the personal representative to place a death notice in the newspapers. This announcement notifies the public of the decreased probated property. It gives the opportunity for others such as creditors who are interested in your estate to submit a claim. As a result, the nature of this real estate transaction becomes public record for anyone to research.

Taking Inventorying of the property

There must be a real and personal inventory taken of the property so the value can be estimated. This is required for the following reasons:

* To cover debts and distributions to beneficiaries: the residence didn’t meet the monetary obligation of the creditors and the property goes to the beneficiaries, an abatement statute occur. This means that one or more beneficiaries can get limited financial gain or none at all

* To guarantee that all property is accounted for. The personal representative is responsible for gathering and inventory the property’s assets to ensure that it’s available for dispensing at the final stages of the probate process. If the property is misplaced or not in the ownership status of the deceased at the time of their death, a redemption statute can occur. This statute can decide if assets or cash can substitute missing property belonging to the beneficiary.

How To Probate A Will

Depending in what state you live in, the process is similar, however call the probate court and start there to get familiar with your own state rules and steps to follow to be sure you are following their rules. Before this process begins, the death certificate for the deceased must be obtained. There are time restrictions on procedures which is a challenge for those with demanding lives.

If the paperwork is submitted late, there are penalties causing delays. There’s a particular order of precedence when giving the letters of administration which is as follows: the surviving spouse, children, grandchildren, father or mother of the deceased, brother or sisters and the rest who qualify.

The petitions have to be updated particularly on who’s allowed to make them in order to obtain appointment for administration. Anyone who’s attracted in the property of an individual without a valid will (intestate) or of a person claiming to be departed may petition to the court. To begin the probate proceedings, the required documentation is a must.

A misplaced or damaged will is allowed to probate if it’s proven that same will was not cancelled, the implementation of it is verified by the court, and its’ requirements are confirmed by two trustworthy witnesses.

13 Steps To Selling Inherited Property

1. The initial step is to have the property in your name.

2. If the home is in the trust, the trustee must be contacted to transfer the title.

3. If the property isn’t in the trust, a visit to probate court is required to have this done.

4. Depending on the state, land must be sent through probate.

5. Probate Letters or Letters of Administration are needed in order for the property to be in someone’s name.

6. If a home is going through probate, it takes a few months unless someone challenges it.

7. The court’s approval is required to transfer the title from the deceased to the heir.

8. The home must be appraised and inspected professionals to assess its’ value before being sold. You have to think of selling a home as if you’re going to a job interview, appearance is key.

9. The interior and exterior of the home has to be modified such as painting, upgrading the kitchen and bath which are the two focal points of the sale.

10. Hire a real estate representative to promote your home in newspapers, websites, and other outlets.

11. Buyers are visual so by taking photos highlighting the inside and outside of your home is ideal. Once a buyer is located and the offer is presented, review it with your realtor before making any final decisions.

12. When the final offer is accepted, the buyer will conduct their own inspection and appraisal. The buyer may request to have other things fixed.

13. The last step is to sign the titles, escrow documents, and wait for the closing date.

Insider Secret Owner Financing Strategies That Will Sell Your House Fast

If you do not know anything about seller financing, you are missing out on a very powerful tool that can help sell your fast super fast.

4 Ways You Benefit With Owner Financing

You and the buyer are in control and can set your own terms for the sale

You cut out the banks and realtors and save money on the fees

You can sell the house very fast if you decide to use this strategy

You’re the bank – sell it to buyers whom have the money and great work history but banks rejected them for a home loan

Warning:

If you do not research these insider secret owner financing strategies – and you’re interested in selling your inherited property, these insider strategies can definitely help you sell fast if you run into a problem and can t sell your house!!!

“If you wish to avoid a costly mistake, not get caught without a backup plan in case you can t sell your house, educate your self about these owner financing insider secrets… the experts don’t want you to know about!”

Taxes On Inherited Property

There may be a deduction of federal, state and/or local taxes from the estate depending on the state. In addition there’s the inheritance tax and estate tax which have different definitions. Inheritance taxes placed when there’s a transfer of possessions received before it’s given out.

The amount depends on the affiliation between the deceased and the offspring. Estate taxis applicable on how much the property is worth when the individual passes. Some states may have one, one of the other or both.

In the case of the sold inherited home, there’s a possibility of paying a capital gains tax on the differentiation between the remaining from the sale and the basis. The basis is the purchase price plus upgrades minus depreciation. Presently, the federal capital-gains tax is 15%.

The handling of the estate is a complex state of affairs. It’s important to have a lawyer manage this matter to ensure the property is distributed without any hindrance. Understanding all the rules and regulations independently can be overwhelming to someone who’s inheriting property from a loved one who passed away.

How to probate a will & selling inherited property does not have to be difficult, the information you have just read should help you get through the probate process easier and less confusion. Just make sure you look into what the probate procedures and rules are for your given state.

Source by Edwin Rosario