The term squatter's rights, known more formally as the right of adverse possession, refers to the right to take ownership of property, under certain conditions, simply by living on or possessing it for a certain period of time.
The exact details of squatter's rights vary greatly from time to time and from place to place. Though in modern times most countries' systems of property law favor the rights of property owners over those of squatters, squatter's rights are recognized to one degree or another in most countries.
In the U.S., a five-point test is typically applied to determine whether the right of adverse possession will be granted. The possession must be:
- actual--the property must be actually put to use or occupied, in a way similar to the way nearby property is used by its owners
- open and notorious--the use must be public and visible, not secret
- hostile--without the permission or approval of the current landowner, for instance, without renting or leasing the land
- exclusive--use of the property not shared with anyone else, particularly the current property owner
- continuous--used continuously for a certain period of time, which may be 10 years, 12 years, 20 years, or some other period as determined by local law
In some jurisdictions, the adverse possession claimant must also have paid property taxes on the property for a certain period of time.
Though exact details differ, generally these same considerations are weighed in the implementation of the right of adverse possession in most modern legal systems.
Adverse possession is in some ways similar to homesteading. Like the adverse possessor, the homesteader may gain title to property by using the land and fulfilling certain other conditions. In homesteading, however, the possession of the property is not hostile; the land is either considered to have no legal owner or it is owned by the government. The government allows the homesteader to use the land with the expectation that the homesteader who fulfills the requirements necessary for the homestead will gain title to the property.
The homestead principle and squatter's rights embody the most basic concept of property and ownership, which can be summed up by the adage "possession is nine points of the law", in other words, "the person who uses the property owns it". The homestead principle and squatter's rights pre-date formal property laws and to a large degree modern property law is a formalization and expansion of these simple ideas.
The homestead principle is the idea that if no one is using or possessing property, the first person to claim it and use it consistently over a period of time owns the property. Squatter's rights embodies the idea that if one property owner neglects property and fails to use it, and a second person starts to tend and use the property, then after a certain period of time the first person's claim to the property is lost and ownership transfers to the second person, who is actually using the property.
The legal principle of homesteading, then, is a formalization of the fundamental homestead principle in the same way that the right of adverse possession is a formalization of the fundamental and pre-existing principle of squatter's rights.
The essential ideas behind the homestead principle and squatter's rights hold generally for any type of item or property of which ownership can be asserted by simple use or possession. In modern law, homesteading and the right of adverse possession refer exclusively to real property. In the realm of personal property, the same impulse is summarized by the adage "finders keepers" and formalized by laws and conventions about abandoned property. In the realm of so-called intellectual property, until just a few hundred years ago all rights in a literary or artistic work remained in the hands of the person who physically possessed the work. The creator of a work who wished to retain control of the work was required to maintain physical control of the work in the manner of a trade secret. As the idea of intellectual property developed, more and more rights are reserved for the creator or copyright holder, regardless of whether or not this person maintains physical control of the work or copies of it. Fewer and fewer rights are retained by physical possessor(s) of the work. Some rights do remain, however, and are codified in the notion of fair use and the doctrine of first sale.
Squatter's rights are one way ownership of property may be transferred from one person to another. Other ways ownership may be transferred include sale of the property, theft of the property by deception, and theft of the property by force. Use of a property may temporarily be granted to another by way of rent or lease. Certain restricted rights to the use of a property may be granted by an easement. In many areas of the world, surface rights, mineral rights, and water rights in a property are separate and may be bought and sold independently of each other.
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