Avoiding Adverse Possession Claims by Renting Portion of Your Property to Neighbor

Signing a rental agreement with the person who appears to be dangerously close to making an adverse possession claim can be an important and easy way of protecting your property.

Adverse possession can be a frightening concept for landowners. It allows a stranger to essentially develop ownership over part of your own land, sometimes a small part and sometimes a large part. Your property is likely one of your greatest investments, if not your greatest. It is critically important to the value of your property that you avoid encumbrances like an adverse possession claim.

Signing a rental agreement with the person who appears to be dangerously close to making an adverse possession claim can be an important and easy way of achieving this protection.

What Is Adverse Possession?

Adverse possession is a legal concept by which a person can acquire valid title to land by meeting several conditions for a certain period of time. These conditions are usually understood as the person having “actual, open, notorious, exclusive, hostile, and exclusive” possession of an area of land for the statutory period – usually between ten and 20 years, depending on the law of the state where the property is located.

For example, a person could walk onto her neighbor’s land, build a shed, and use it for 30 years. The original property owner may encounter legal trouble if, after decades of inaction, he tries to force the neighbor to destroy her shed. The existence of the structure was obvious to the original owner for all those years, who nevertheless did nothing about it. The shed-building neighbor may well have obtained adverse possession of that bit of land. Learn more about the legal conditions and details of this concept on Nolo’s Adverse Possession page.

How would you know if someone is already squatting on a part of your land? Sometimes, it would be obvious to you, like if someone sets up camp on your driveway one day and builds a structure.

But other times, it might not be so clear. This is especially true for property that isn’t an easily defined quadrilateral plot. Trees and fences might seem to line up with the property boundaries, but often they do not. In these situations, the best route is to hire a land surveyor. For a generally modest fee, the surveyor can examine property deeds registered with the county clerk, and then conduct a physical inspection to see whether any person or thing is encroaching on “your” property.

How Does Offering to Rent the Property Help?

Your goal as a property owner is to avoid a successful adverse possession claim. You might not be particularly worried about your neighbor’s activity now; your bigger concern will come in five, ten, or 20 years, when you or your children might want to sell the property. Clouds on title, such as easements or adverse possession claims, will reduce the value of your property or frighten away buyers.

Rent is an extremely effective way to defeat a claim of adverse possession. Recall in the legal definition above that, for a person to successfully have a claim for adverse possession, the possession of the land must be “hostile.” This means that the use of the land must be without permission. If the landowner invites the person to use the land, then he or she is there by revocable license. If the landowner rents the person the land, he or she is merely a tenant; moreover, there is a clear paper trail detailing lack of ownership. After all, a person would never pay money to rent land that he or she can legitimately claim to own. Courts routinely hold that any permission on the part of the landowner – such as actively renting the land – interrupts the statutory period required to establish that the possession was hostile and under a claim of right.

So, if you believe that someone is improperly occupying your land after conducting your land survey, approach the person and offer to rent the parcel. Unless the person is really trying to steal your land, he or she will most likely acknowledge the mistake and either stop encroaching or willingly pay rent. You might be willing to rent it for only a nominal amount – say, $10 per year. Or if the encroachment is significant enough, you might actually seek to make more substantial revenue.

Either way, the existence of the written rental agreement (which you should, of course, keep in a safe place) would establish to a court that this individual did not act as an owner of the land; but merely as a tenant.

See Nolo's free "Sample Rental Agreement for Neighbor's Use of Portion of Your Land" for help with this.


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