Responding to a neighbor’s adverse possession claim can be a daunting process. In Oregon, a neighbor can acquire your land through adverse possession by showing that they used a portion of your property in a way that was visible (open), well-known (notorious), without permission (hostile), and ongoing (continuous) for at least 10 years. A fence, shed, or gate that is built a few inches or feet into your property and remains standing for 10 years can count as an adverse use and cause the neighbor to legally claim ownership of your property. If you do not hire a licensed surveyor periodically to survey your property, it can be very difficult to tell if a neighbor’s fence is built on your land. All the while, time marches on until the encroachment ripens into an adverse possession claim that carves off a slice of your property.
A property remains vulnerable to adverse possession after it is sold to a new owner. Your neighbor may make an adverse possession claim against you after you purchase a property, based on an adverse use that the seller failed to challenge. You might assume that your title insurance would cover adverse possession as a problem with ownership records (called a title defect). But title insurance generally does not cover adverse possession claims—in their disclaimers of coverage, insurance agents often cite the exception that the policy will not insure against matters that a survey would reveal, and coverage is usually limited to defects appearing on the public record.
You can protect yourself against adverse possession by obtaining a warranty deed from the seller. In a warranty deed, a seller guarantees that the property is free and clear of encumbrances and is required by Oregon statute to defend title the property—even against claims that the seller did not know about prior to signing the warranty deed. See Leach v. Gunnarson, 290 Or 31, 42 (1980); ORS 93.850. If your neighbor acquires property from you by adverse possession, the seller under a warranty deed must pay your damages and defense costs, including attorney fees. See Chaney v. Haeder, 90 Or App 321, 326 (1988). The seller under a warranty deed has a clear incentive to cooperate with you and testify against the neighbor.
When a neighbor raises an adverse possession claim in a demand letter or lawsuit, you should first determine if you purchased the property under a warranty deed. If you did, then you and your lawyer should immediately notify the seller of their obligations under the warranty deed and gain their cooperation. The seller is in the best position to testify against your litigious new neighbor, as they likely know what happened during the adverse possession period.
Chenoweth Law Group LLC has extensive experience with using often overlooked remedies, such as the buyer’s remedy against the seller under a warranty deed, to resolve complicated boundary line and property disputes. If you’re dealing with an adverse possession claim or any other real property issue, Chenoweth Law Group’s experienced real estate litigators can help you clear title in your property and recover damages.
