Adverse possession amid the foreclosure crisis
posted by David Fagundes
Apparently I can’t stop blogging about morality, which is kind of weird because it certainly doesn’t play much of a role in my personal life or even my writing. Anyway, a student from a past property class recently passed along this really interesting article about Kenneth Robinson, a man who occupied a vacant house in a tony suburb of Dallas, apparently in an attempt to adversely possess it. The contemporary twist is that the house—valued at about $300,000—was vacant because its owners had abandoned it, apparently when they found themselves upside down on their mortgage. (They appear to still be the house’s title holders, since foreclosure has not yet taken place.)
I like this story for lots of reasons, including that it provides another modern data point about the continuing relevance of adverse possession. Another reason is that it stresses that adverse possession “is not just a loophole, it’s the law.” The article says that adverse possession is “as old as Texas” but even that understates the case—it’s actually one of the oldest property doctrines around, dating to Hammurabi’s Code.
But I like this story especially because it raises a new twist on the rationale for and merits of adverse possession doctrine. News stories about adverse possession are almost invariably accompanied by cries of outrage by people who regard the doctrine as offensive to property rights. In class, students also tend to regard the doctrine skeptically, though (to their credit) in a more measured and thoughtful way.
As this article (or at least the comments to it) illustrate, though, the ongoing housing crisis and related foreclosure epidemic have caused public reaction to adverse possession cases to become less angry and in some cases even positive. I explore this phenomenon in more detail below the fold.
Adverse possession may be the most counterintuitive doctrine introduced to students during their first year of law school, or even at any time during law school. The notion that a trespasser can become a valid title holder, eliminating the prior owner’s claim to the property, seems terribly wrong to students at first blush.
And that’s exactly why I enjoy teaching it so much. Because when examined more closely, there are plausible utilitarian rationales underlying adverse possession. Adverse possession may reward and incentivize more productive use of land, increasing aggregate social welfare. Pressed to examine this and other rationales, students may not end up agreeing that adverse possession is a good doctrine, but they learn that the story is a lot more complicated than their initial reaction indicated.
Public reaction to individual adverse possession cases typically lacks this degree of nuance, though. Adverse possessors are regarded as at least immoral tricksters, at worst dastardly thieves and criminals. Outrage over recent adverse possession cases in New York and Colorado has spurred successful movements to have those states’ laws changed to limit the scope of the doctrine.
But the tenor of the public reaction to the recent adverse possession case (measured at least by written comments to the article) in Texas is somewhat different. Plenty of comments–perhaps even most of them–regarded Robinson as an unadulteratedly evil threat to property rights. And the owners of other houses in the suburban Dallas neighborhood where Robinson is squatting don’t seem too thrilled about his presence there.
Others, however, appear to regard Robinson as heroic and clever. One commenter wrote, “What a great story!!! All I can say is ‘Good for him.’” Others suggested that Robinson’s ingenuity meant that he had a moral claim to the property: “I love this!!! The bible says that The wealth of the wicked is stored up for the righteous. Good luck Mr. Robinson. Move the fam in and enjoy your home!! You’ve definitely earned it!! Too bad you [other readers] weren’t smart enough to think of this.”
Several readers raised redistributive defenses of Robinson, suggesting that he was striking a blow against the abusive practices of mortgage companies and banks (although it’s not Bank of America, the current noteholder, to whom Robinson is adverse, since foreclosure has apparently not yet taken place), and grabbing a win for the common man in a Robin-Hood style move. As one commenter put it, “As crooked as the banking and mortgage systems are, kudos to Mr. Robinson for finding a way to make it work for him.”
The reason that public reaction to the Robinson case is different than earlier ones may be that the original owners are out of the picture. In the earlier cases, the adverse possession deprived a visibly upset private individual of (at least some of) their land. In this case, the only adverse party in the picture is Bank of America, who (upon foreclosure, at least) will have the house only as part of its overall book of distressed assets. It’s much easier to be sympathetic in the latter case given that the only apparently loser is a faceless, and possibly even abusive, business entity.
But that distinction doesn’t change the plausibility of the rationales underlying adverse possession. An adverse possessor may make better use of vacant and mouldering real property even when the title holder is a natural rather than a juridical person. And if redistribution is your thing, adverse possession can take from rich individuals (as well as rich banks) and place property in the hands of the less wealthy.
And the context of foreclosure may lend novel weight to the justice of adverse possession. Banks and other lenders bear much of the responsibility for the housing mess (in addition, of course, to greedy and overextended borrowers), which includes more vacant houses than they can–or at least care to–keep track of. Should squatters move into these houses and eventually acquire title to them, there seems some measure of equity in that (though as I explain below, it’s very unlikely that any given squatter will ever actually acquire title by adverse possession).
This isn’t the first time that the foreclosure crisis has bent the arc of public dialogue about morality and the law (the other example that springs to mind is the debate about the ethics of strategic mortgage default). But this one is particularly salient because it has spontaneously exhumed rationales for adverse possession that, while fully available, remain unexplored amid the hysterical moral superiority that usually characterizes the few public discussions of adverse possession that spring up in American popular culture. I hope that even after the foreclosure crisis passes, people will remember this moment and that it will contribute to more nuanced, less manichean dialogue about adverse possession in the future.
Doctrinal/practical postscript: In a followup to the initial article, KHOU reports that Robinson has been flooded with responses by others seeking to take advantage of adverse possession as a fast-track to ownership. My unsolicited advice to Robinson and his fans: Adverse possession isn’t a magical way to get instant ownership of vacant homes. At present, Robinson remains a mere trespasser on the property, even if he’s attained physical possession of it. All his possession of the land does is start the adverse possession clock (which appears to be 10 years in Texas), and doesn’t give him any enforceable rights in the house. At any time during that period, the titleholder to the house can demand that Robinson leave, and even get the police to come and kick him out for trespassing. The former would be enough to re-set the adverse possession clock by breaking the exclusivity of Robinson’s possession; the former would leave Robinson out on the street, or worse. Of course, if the title holder asserts no claim to the property during a decade of Robinson’s occupancy, and Robinson meets all the other elements of adverse possession, then he’d become the title holder, but the road is a lot longer and more complicated than many observers appear to understand.