The law governing California real estate investment, development, deeds of trust, and title evolves in real time | Lessons from the courtroom battlefront

A Lump Sum Payment of Delinquent Taxes Isn’t Enough for Adverse Possession

As detailed in prior posts here and here, to establish a claim for adverse possession, a plaintiff must prove the following elements:

  1. Possession must be by actual occupation under circumstances giving reasonable notice to the owner.
  2. Possession must be hostile to the owner’s title.
  3. The plaintiff must claim the property as his own under either color of title or claim of right.
  4. Possession must be continuous and uninterrupted for five years.
  5. The plaintiff must timely pay all the taxes levied and assessed on the property during the period of possession.

For adverse possession of an easement, the plaintiff must pay the taxes as long as the easement has been separately assessed.

What if the plaintiff allows the taxes to become delinquent, but then pays them off in a lump sum payment within the five-year period?  A recent opinion from California’s First Appellate District — McLear-Gary v. Scott — addresses the issue.

Facts: attempted adverse possession of easement; lump sum payment of delinquent taxes

Deborah McLear-Gary owned a parcel in Mendocino County, and the Scotts owned a neighboring parcel.  McLear-Gary claimed an easement passing through the Scotts’ parcel.

The Scotts replaced an old wooden gate with a metal gate across the easement route and kept the gate locked, effectively blocking McLear-Gary from accessing the easement across the Scotts’ parcel.

McLear-Gary sued to quiet title to the easement.  The Scotts alleged as an affirmative defense that they had acquired McLear-Gary’s easement rights by adverse possession since they had barred McLear-Gary from using the easement for over five years.  The Scotts submitted evidence that the taxes for the area in question were delinquent for the years 2005, 2006, 2007, and 2008, but were paid off in a lump sum on April 7, 2011.

Trial court’s judgment: adverse possession elements satisfied

The trial court ruled in favor of the Scotts, finding that McLear-Gary’s easement was extinguished by the Scotts’ adverse possession.

The court found that the elements of adverse possession were met by the Scotts’ maintenance of the locked gate across the easement and the Scotts’ lump sum payment of the delinquent taxes within the five-year adverse possession period.

Court of appeal’s opinion: payment of delinquent taxes is not “timely,” so no adverse possession

The Court of Appeal reversed, ruling in favor of McLear-Gary.

The court based its ruling on the language of Code of Civil Procedure section 325(b), which states: “In no case shall adverse possession be considered established under the provision of any section of this code, unless it shall be shown that … the party or persons, their predecessors and grantors, have timely paid all state, county, or municipal taxes that have been levied and assessed upon the land for the period of five years during which the land has been occupied and claimed.  Payment of those taxes by the party or persons, their predecessors and grantors shall be established by certified records of the county tax collector.”  (Emphasis added.)

The “timely” requirement, the court noted, was added by a 2010 amendment to the statute, and had not been previously interpreted.

The court concluded that it was “clear that the Legislature intended to prevent adverse possessors from satisfying the tax payment requirement with a lump sum payment of delinquent taxes.”  The amendment was intended to “address a problem in which would-be adverse possessors scan tax records for parcels of land with outstanding tax obligations, make a lump-sum payment of taxes for the previous five years, and then claim that they have occupied the land for that five-year period.”

As such, the court held that only proof of continuous, annual tax payments throughout the five-year period will suffice for adverse possession.

Lesson

Under the McLear-Gary opinion’s interpretation of Code of Civil Procedure section 325, a plaintiff claiming adverse possession cannot succeed by simply paying the taxes for the property in question at some point during the five-year period.  The taxes must also be paid “timely.”  Making a lump sum payment of taxes that have already become delinquent does not satisfy the statutory requirement.

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