Daily Development for Monday, August 28

By: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri
randolphp@umkc.edu

ADVERSE POSSESSION; REQUIREMENT OF PAYMENT OF TAXES: Adverse possessor satisfies real estate tax requirement of Minn. Stat. A7541.02 where party is assessed, and pays taxes on disputed parcel as physically occupied even though assessment record legal description is inconsistent with the physical occupation.

LeGro v. Saterdalen, 607 N.W.2d 173 (Minn. Ct. App. 2000).

Adverse possessor and her predecessors in title occupied a disputed parcel of property for 20 years. Disputed parcel was legally owned by an adjoining resort owner. The tax assessments described the parcel as including two cabins occupied by the adverse possessor. The County Assessor testified that for the past 20 years, the adverse possessor and her predecessors were assessed taxes on the disputed parcel. In fact, however, the assessor's records were wrong, and the property in question in fact was owned by a neighboring landowner, who believed that he was paying taxes on the parcel as part of his own tax bill.

The neighboring land owner acknowledged that the adverse possessor had satisfied the other elements of adverse possession under Minnesota law, but argued that he too had been paying taxes on the disputed parcel. The Court of Appeals found that fact to be untrue, but in any event irrelevant to the question of whether the adverse possessor had satisfied the real estate tax requirements of the statute. The issue is whether or not the adverse possessor has paid taxes on the disputed parcel, not whether more than one party has paid taxes on the parcel or whether the assessment records contain the correct legal description for the disputed parcel.

Comment 1: The editor, upon reading this, realized that he really had no idea what the statutory purpose was in those jurisdictions requiring the payment of taxes as a condition for adverse possession. In chasing the issue down, the editor discovered that the bulk of the states having such a requirement are in the West or Midwest (with Florida - at least at one time- a notable exception) and that the underlying limitations period for adverse possession in many of these states tend to be on the low side, at least as compared to the 20 year periods one finds on the east coast. Minnesota is an exception to this - a fifteen year limitations period and the taxes need be paid for only five years.

Several commentators have concluded on the basis of this that the purpose of the tax requirement is to put some "brake" on what otherwise might be an easy way to steal the land of another. See 37 Cal. L. Rev 477 (1949) (the most comprehensive treatment the editor found on a short search.) Also see 9 Santa Clara Lawyer 244 (1969) (both are student comments).

Other rationales found in the cases: simply to encourage the payment of taxes; to insure that possessors really are bona fide claimants of ownership; to protect the true owner from paying taxes for many years and then losing title.

Comment 2: The Santa Clara Lawyer commentator describes the payment of taxes requirement as a pointless anachronism that ought to be discarded. In California, which permits adverse possession to run in five years, the editor concludes that something ought to be there to slow things down, although the editor concurs that the tax requirement may not be the slickest device available.

Comment 3: If you think that adverse possession isn't used to steal property, as the editor once did, you might find instructive the story (reported once before here) of the self described "former Green Beret" in San Bernardino County in California who called to ask the editor to testify as an expert witness concerning adverse possession law. This character had made a business of theft by adverse possession, and in fact was now taking "referral fees" to set others up in the same business. These folks looked for properties that had been subjected to foreclosure sales or were in the process of foreclosure, where the original owners had moved out. They came in, fixed the places up a bit, and rented them to tenants. In the late eighties, when home lenders in California were failing by the boatload, many of these properties were ignored by the mortgagees, either before or after foreclosure, for a number of years, giving this crew just the opening it needed to claim adverse possession under the California five year statute. And, yes, they did pay the taxes.

Readers are urged to respond, comment, and argue with the daily development or the editor's comments about it.

Items in the Daily Development section generally are extracted from the Quarterly Report on Developments in Real Estate Law, published by the ABA Section on Real Property, Probate & Trust Law. Subscriptions to the Quarterly Report are available to Section members only. The cost is nominal. For the last six years, these Reports have been collated, updated, indexed and bound into an Annual Survey of Developments in Real Estate Law, volumes 1‑6, published by the ABA Press. The Annual Survey volumes are available for sale to the public. For the Report or the Survey, contact Maria Tabor at the ABA. (312) 988 5590 or mtabor@staff.abanet.org

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