Are There Any Holes in My Adverse Possession Case - Before I Take It to Court

[RXBrown]

My question involves real estate located in the State of: Michigan

Hey, all. I have 3 points in a case that I will likely file, and any help is appreciated to see if you can poke a hole in these points. I don't see any real holes in this case, but a 2nd/3rd/xx pair of eyes would be appreciated to make sure I'm not overlooking anything.

Adverse possession (squatter's rights) case in Michigan:

* So, I'm living in a house that got foreclosed by the county for back taxes in 2010.
* The judgment of foreclosure was entered and the county then had clear title (in 2010).
* The house was then sold at auction (2010) but the purchaser (Purchaser "A") did not get the deed until 2011 (irrelevant?)
* After Purchaser "A" got the deed in 2011, for yet another year he never came to get possession of the house - so, I'm still living there in 2012.
* In 2012, Purchaser "A" sold the property to Purchaser "B".
* Then, Purchaser "B" never - repeat: never - came to claim the property or go to court to evict me - so, I'm still living there... still now in 2020.

ADVERSE POSSESSION CASE BASIS:
In Michigan, generally the statute of limitations is 15 years. But, for property acquired through tax sale the SOL is 10 years [MI law reference below]. I've been here now longer than 10 years since the 2010 county tax foreclosure.

POSSIBLE CHALLENGES?:

1) CLAIM AGAINST THE COUNTY: The county owned the property for the first year (2010-2011) - could that time period be 'disregarded'? The argument being that out of the 10 years, one of those years was time in which the property was still owned by the county - and therefore that time doesn't count toward the 10 year requirement since you can't bring an adverse possession claim against a government entity (generally, though it's been done).

ARGUMENT: This should not be a valid challenge because A) you are only barred from bringing claims against the government entity for "public" lands, not 'non-public' tax foreclosed lands. And B) The county is not the current owner/defendant.
( Is this a valid argument? )

2) PROPERTY WAS ACQUIRED BY QUIT CLAIM DEED: Purchaser B bought the property via Quit Claim deed from purchaser "A". So, should the SOL be 15 years? Note: Purchaser "A" originally acquired the house through deed by the county via tax foreclosure sale, and he never acquired possession; real possession nor legal possession via any court.

ARGUMENT: A purchaser (purchaser "B") does not "gain" any new rights, interests or powers that didn't already exist previously with the property. Purchaser "A" was entitled to a 10-year SOL. As such, when he sold the property to purchaser "B", that did not 'invent' or create any new SOL rights.
( Is this a valid argument? )

3) PROPERTY TAXES NOT PAID BY ADVERSE POSSESSOR: I didn't pay property taxes during that 10-year period (bizarre as it is, purchaser "B" has been paying the property taxes - albeit always 2 or 3 years in arrears; there are currently 2018-19 taxes still due).

ARGUMENT: In some states there is a statutory requirement to have been paying the property taxes in order to satisfy an adverse possession claim. However, in Michigan it is not a statutory requirement.
( Is this a valid argument? )

I very much appreciate your time and any thoughts or feedback.

NOTE: Yes, it appears that I have satisfied all of the other statutory requirements for this adverse possession claim.


( ===== MICHIGAN LAW ===== )

MCL 600.5801 Limitation on actions; time periods; defendant claiming title under deed, court-ordered sale, tax deed, or will; other cases.
Sec. 5801. No person may bring or maintain any action for the recovery or possession of any lands or make any entry upon any lands unless, after the claim or right to make the entry first accrued to himself or to someone through whom he claims, he commences the action or makes the entry within the periods of time prescribed by this section.
(1) ...
(2) When the defendant claims title under some deed made by an officer of this state or of the United
States who is authorized to make deeds upon the sale of lands for taxes assessed and levied within this state
the period of limitation is 10 years
(4) In all other cases under this section, the period of limitation is 15 years.

[adjusterjack]

Now that you've read the statute I suggest you read the many appellate case decisions regarding 600.5801:

https://scholar.google.com/scholar?h...600.5801&btnG=

[Taxing Matters]

Before you file the adverse possession claim I strongly urge you to seek advice from a real estate lawyer familiar with adverse possession claims. If you file too early and put the true owner on notice that you intend to seek title by adverse possession the true owner may start the process to eject you and thus kill your adverse possession claim. When title to the property is obtained by the county in a tax foreclosure sale the SOL period may start when the city has actually provided the deed to the buyer. A federal appeals court decision suggests that is the case, but the state courts have not made a clear decision on that and ultimately the Supreme Court of Michigan has the final say on the issue. It might be prudent to wait until it has been 10 years from the date the city gave the deed to the buyer to avoid a problem of filing too early and alerting the true owner that he needs to take action. You want to be sure that you have all your ducks properly lined up here. The fee you pay the lawyer for a review and advice on this is a relatively small investment to get the property. If you don't do that and screw it up, you could lose your shot to get the property.

That you didn't pay property taxes does not appear to matter in Michigan like it does in some other states. And the deed from A to B would not restart the SOL for your adverse possession claim.

[RXBrown]

When title to the property is obtained by the county in a tax foreclosure sale the SOL period may start when the city has actually provided the deed to the buyer. A federal appeals court decision suggests that is the case, but the state courts have not made a clear decision on that and ultimately the Supreme Court of Michigan has the final say on the issue.

While the courts can be erratic sometimes, as it pertains to the time table to start the SOL I'd like my chances. There was recently a case decided (in Michigan) wherein a plaintiff actually did prevail on an adverse possession claim against the state regarding state owned property. I don't remember the case off the top of my head*, but I believe it triggered a remedy in the legislature to solidify and clarify the statute. The case involved both the elements of adverse possession 'and' acquiescence.

My point is: If a claim was able to prevail against the state (subentity thereof) pertaining to state owned lands, and since there is nothing relevant (off the top of my head - I haven't done a deep dive on this point) pertaining to non-public real property, then I'm hard-pressed to defer to any legislative theory by the state that the state is immune from claims in matters of the public good.

A second, and even stronger point is that this case is exactly the poster child for this sort of situation. In the last 2 or 3 years, the county(s) have literally been working angles, exploring policy, and considering amending the statute specifically to avoid 'abandonment after-the-fact'. There are so many properties after sale (exactly such as this one) where purchasers either don't maintain the property, don't keep up the property taxes, or both. One of the principle policy implementations being considered is a "reverter clause" which would make it easier for the county to automatically regain ownership of the property without having to jump through legal hoops when a purchaser does not fulfill requirements.

All of that said, yes - I did initially (and reluctantly) consider having to accept the date that the buyer took deed from the county as the start date. It was after scrutiny of the statute and determining that the relevant restriction applied to "public lands" did I revise my consideration of that aspect.

Thanks for the input - I will continue to scrutinize that element more closely.

EDIT: *I thought for sure I had it in my library somewhere.... in the TEMP directory, not yet officially filed and added to the (digital) library. The case was Waisanen v Superior Township, No. 311200 (June 24, 2014):
Excerpt: "The court further found that Waisanen satisfied the elements of adverse possession and acquiescence and quieted title in Waisanen. The court noted that it was the Legislature’s responsibility to “fix” the statute if, in fact, subsection 2 did not represent its intent regarding protection for municipal corporations."

EDIT: *I thought for sure I had it in my library somewhere.... in the TEMP directory, not yet officially filed and added to the (digital) library. The case was Waisanen v Superior Township, No. 311200 (June 24, 2014):
Excerpt: "The court further found that Waisanen satisfied the elements of adverse possession and acquiescence and quieted title in Waisanen. The court noted that it was the Legislature’s responsibility to “fix” the statute if, in fact, subsection 2 did not represent its intent regarding protection for municipal corporations."

EDIT #2: Ok, I finally made the time to comb through this a little bit. As I mentioned previously, the legislature 'did' clarify the statute; in House Bill 4747 (2015), subsequent PA 52'16, they changed the language of the statute which does tighten the defense of claims against state-owned property. But, that still does not derail the question and/or argument as it pertains to when does the SOL begin in situations like this. I'll look at it more when I have time.

[Taxing Matters]

But, that still does not derail the question and/or argument as it pertains to when does the SOL begin in situations like this. I'll look at it more when I have time.

Right, I don't know that there is a truly bright line rule of law yet set on that in this situation. Are you the homeowner that had the property taken for failure to pay the real estate taxes and simply stayed there after the tax sale? If so then one of the things that you'll want to look into is exactly when your right to possession of the property ceased. You'd still have the right to possession at least through the redemption period since if you redeem the property there is no transfer of title to the property. But do you still have a right to possession for some period after that, too? The reason that matters is that while you have the right to possession of the property the adverse possession clock doesn't start to run. You are only adversely possessing the property if you are on the property without the right to be there.

[RXBrown]

Right, I don't know that there is a truly bright line rule of law yet set on that in this situation.

Correct, there does not appear to be a definitive road marker (or case law ruling that I can find) yet on this issue [SOL]. (I don't mind the prospect of being a trailblazer; being the first to bring and prevail on the argument. Though, I can't likely foresee this matter making it that far up the chain.) That said, considering that 'the state' is doing everything within their power to 'constrain' a tax auction purchaser's rights after sale, not 'expand' their rights, that fact works in my favor.

Are you the homeowner that had the property taken for failure to pay the real estate taxes and simply stayed there after the tax sale? If so then one of the things that you'll want to look into is exactly when your right to possession of the property ceased. You'd still have the right to possession at least through the redemption period since if you redeem the property there is no transfer of title to the property.

Yes, I was the homeowner. And correct, my right of possession extended through the redemption period - which in Michigan was:
"fee simple title to property foreclosed by the judgment will vest absolutely in the foreclosing governmental unit, except as otherwise provided in subdivisions (c) and (e), without any further rights of redemption, if all forfeited delinquent taxes, interest, penalties, and fees,... are not paid ... within 21 days of the entry of a judgment foreclosing the property [in a contested case]"

But, yes, I am outside of the 10 years, or '21 days plus 10 years'.

This situation makes my occupation of the property a "holdover tenancy" - in which case:
a) It is "understandable" (in the eyes of the court) that I still possess the property;
b) But, that does not give me a 'legal right' to still possess the property;
c) However, not having a 'legal right to possess the property' does not make it 'illegal' to possess the property (wherein they could haul me off to jail). I simply have no rights to the property and the typical resolution, as you likely know, is that the new tax auction purchaser goes to court to have the court "authorize" the use of the sheriff's powers to remove (evict) the holdover tenant.

That said, and this is also to my favor, the state did eventually start to include notice in their policy outline that "after foreclosure the previous owner has to vacate the property".


NOTE: Just for reference for any future readers of this post, Case Western Reserve Law Review published a legal note pertaining to this very issue of tax foreclosure post-sale failures: "Interrupting the Blight Cycle: Managing the Future of Properties in Tax Foreclosure Sales Through Pre- and Post-Sale Initiatives" (Ellen Kirtner)

[adjusterjack]

Yes, I was the homeowner.

Let's see if I have this straight. You're a deadbeat who lost his house in foreclosure, squatted in it for ten years and now you want to steal it from the current owner. That's about as low as you can get.

Yeah, yeah, TM, I know it's not stealing if there is a legal loophole that allows it.

[budwad]

ADVERSE POSSESSION CASE BASIS:
In Michigan, generally the statute of limitations is 15 years. But, for property acquired through tax sale the SOL is 10 years [MI law reference below]. I've been here now longer than 10 years since the 2010 county tax foreclosure.

I may be incorrect but I think you are misreading the law. You are not claiming adverse possession on land owned by the state but from whom the state sold the land to after the tax sale. When property reverts to the sovereign (the state) the SOL clock restarts when they transfer title to a new owner. You lose all claims that preceded that date. Therefore, the SOL to claim AP is 15 years not 10 years.

This is the statute:

REVISED JUDICATURE ACT OF 1961 (EXCERPT)
Act 236 of 1961


600.5801 Limitation on actions; time periods; defendant claiming title under deed, court-ordered sale, tax deed, or will; other cases.


Sec. 5801.

No person may bring or maintain any action for the recovery or possession of any lands or make any entry upon any lands unless, after the claim or right to make the entry first accrued to himself or to someone through whom he claims, he commences the action or makes the entry within the periods of time prescribed by this section.

(1) When the defendant claims title to the land in question by or through some deed made upon the sale of the premises by an executor, administrator, guardian, or testamentary trustee; or by a sheriff or other proper ministerial officer under the order, judgment, process, or decree of a court or legal tribunal of competent jurisdiction within this state, or by a sheriff upon a mortgage foreclosure sale the period of limitation is 5 years.

(2) When the defendant claims title under some deed made by an officer of this state or of the United States who is authorized to make deeds upon the sale of lands for taxes assessed and levied within this state the period of limitation is 10 years.

(3) When the defendant claims title through a devise in any will, the period of limitation is 15 years after the probate of the will in this state.

(4) In all other cases under this section, the period of limitation is 15 years.
History: 1961, Act 236, Eff. Jan. 1, 1963

[RXBrown]

I may be incorrect but I think you are misreading the law. You are not claiming adverse possession on land owned by the state but from whom the state sold the land to after the tax sale. When property reverts to the sovereign (the state) the SOL clock restarts when they transfer title to a new owner. You lose all claims that preceded that date. Therefore, the SOL to claim AP is 15 years not 10 years.

Refer to my original argument:
ARGUMENT: A purchaser (purchaser "B") does not "gain" any new rights, interests or powers that didn't already exist previously with the property. Purchaser "A" was entitled to a 10-year SOL. As such, when he sold the property to purchaser "B", that did not 'invent' or create any new SOL rights (rights that didn't already exist with the property).

When purchaser "A" acquired the property, he did so as the statute says:
"(2) When the defendant claims title under some deed made by an officer of this state or of the United States who is authorized to make deeds upon the sale of lands for taxes assessed and levied within this state the period of limitation is 10 years."

I.E. Purchaser "A" has 'title' through the 'deed' which was made by the county [officer of the state]; the county being "authorized to make deeds" by virtue to the tax sale. Because his title was acquired under that circumstance, the SOL - as the statute indicates - is 10 years. That is the extent of the rights attached to the title for that property at that point - period. So, if purchaser "A" had never took possession of the property (and never sold it to anyone else), it should be clear that an adverse possession case brought against "A" would have involved a SOL of 10 years per the statute.

So, just because he transferred the ownership or sold the property to someone else, that does not now magically make the property have a new and longer SOL - no differently than just because he sold the property would not mean that any liens against the property should magically go away just because he sold it to purchaser "B". Also no differently than if Joe sells his property to Mary right before the tax foreclosure goes through... Mary can't then claim that the property shouldn't be foreclosed upon since she was never given notice of the foreclosure or because she 'newly' acquired the property. The statutes don't allow those sorts of loopholes, or everyone would simply transfer ownership to get around the laws.

NOW: "If" purchaser "A" had acquired possession of the property before he sold it to "B", then yes in that case he would have been selling a property which had the full rights of ownership and the full rights of possession. But, he didn't; so, he doesn't. Because "A" never perfected his title in the property, "B" inherits the same rights as well as the same liabilities which existed with the property when "A" owned it.

I may be incorrect but I think you are misreading the law. You are not claiming adverse possession on land owned by the state but from whom the state sold the land to after the tax sale.

The question of 'the state' arises only as it pertains to the one year (2010-2011) in which the state had not yet transferred title to purchaser "A". For purposes of an AP claim against purchaser "B" (or "A"), it could be argued that including that first year in the timeline of the 10 years would be the same as bringing a claim against the state - since "title" for that year was with the state and the statute is somewhat 'leaning' in the direction that you cannot bring an AP claim against the state.... (even though this is not a claim against the state... directly). It's GRAY AREA (but it's an argument I'd make if I were the defendant).

NOTE: No, I am not making any claims regarding any time before the date of the judgment of foreclosure by the county. That time period is moot at this point, since it is now more than 10 years since the judgment of foreclosure. The 'only' legal question which would remain to be adjudicated by the court is:
Since the county enjoys the
privilege of erasing all interests
in the property as of the
date of the judgment of foreclosure, should the county be
bound by the responsibilities of ownership
and the new statute of limitations begin on the
date of the judgment of foreclosure?

Logically, just like it reads on paper, I am of the opinion that it should.

Let's see if I have this straight. You're a deadbeat who lost his house in foreclosure, squatted in it for ten years and now you want to steal it from the current owner. That's about as low as you can get.

Yeah, yeah, TM, I know it's not stealing if there is a legal loophole that allows it.

Hello, adjusterjack. I'm open-minded and would welcome any suggestions that you have as to how I should handle the situation; what do you feel should I do with the property in this case?

[budwad]

I am not going to argue the point. I gave you my opinion that your SOL runs for 15 years from the date that the state transferred the land to your buyer A. You should now get an opinion from an attorney.