There are several different ways that people in Pennsylvania could make speculative real estate investments. Some people will purchase properties in the hopes of repairing buildings that stand on them and then reselling the property in the near future for a profit.
Other people might purchase land that is currently not in a high-demand area and hold that property until development approaches. At that point, the property owner can sell the land at a substantial profit to developers or would-be homeowners who now see the area as desirable.
Unfortunately, holding property as an investment can mean that you don’t spend much time at the property or investing in its maintenance. If someone decides that they want that property, they may attempt to establish adverse possession of real estate that you paid for, and continue to pay taxes and possibly insurance on, as well.
What is adverse possession?
Adverse possession is the idea that someone can establish legal ownership of a property without purchasing it or securing the permission of the owner on record. Some people also refer to this legal concept as squatter’s rights.
States have different attitudes toward someone establishing adverse possession over the land of another individual or business. Typically, the person hoping to establish adverse possession must openly take possession of the property, cover expenses associated with its maintenance and make improvements on the property for many years before they bring a claim in court.
Does Pennsylvania recognize adverse possession claims?
Pennsylvania law does allow individuals to eventually claim possession of a property that they have not purchased, although the process typically can only start after they have maintained possession of someone’s property for 21 years.
In fact, Pennsylvania lawmakers recently streamlined the adverse possession in specific scenarios. Someone living on a property with an absentee owner might be able to claim adverse possession of the property by filing a quiet title action after 10 years, not 21 years, provided that the circumstances meet the new requirements. The property must have a single-family dwelling on it and must have its own separate lot on record. The land itself must have half of an acre or smaller.
Properties owned by the government and those in housing cooperatives or condominium associations are not eligible for this new process. It’s worth noting that liens and other blemishes on the property’s title will pass to the new owner if they make a successful claim under Pennsylvania’s adverse possession law.
Provided that you inspect your properties every few years and evict anyone staying there illegally, you can limit the potential of anyone claiming adverse possession to property you own.