Mcle Self Study Article: Encroachments, Encroachment Easements, and the Statute of Limitations Decoded

• Publication year: 2017
• Author: Edward Newman

MCLE Self Study Article: Encroachments, Encroachment Easements, and the Statute of Limitations Decoded

Check the end of this article for information on how to access one MCLE self-study credit.

Edward Newman

Edward W. Newman practices real estate law on the top floor of the tallest building in Capitola Village at the Newman & Marcus law firm.

I. INTRODUCTION

Real estate lawyers in California frequently encounter encroachment issues. In doing so, they inevitably perceive that the law in California regarding encroachments is antiquated, confusing, and often inconsistent. This article is an attempt to bring understanding to some of the issues regarding existing encroachment law as well as some relatively recent developments in that law.

An "encroachment" is generally defined as an interference with or an intrusion onto another person's property.¹ More specifically, in real property law the term includes buildings, walls, or other structures extending over a property line;² driveways or portions of driveways on neighboring property;³ and landscape features,⁴ patios, decks,⁵ yard areas, or recreational amenities⁶ located partly on adjoining property. The term also includes eaves, gutters, and even buildings extending into the airspace of adjacent property.⁷ An encroachment can also be entirely underground.⁸

Disputes frequently arise when one neighbor obtains a survey and discovers an encroachment, although in some cases the parties are actually aware of—but ignore— the encroachment for many years. Until resolved, encroachments create a cloud on title for both properties and affect their marketability. An encroachment can be addressed by property owners in at least three different ways. The most efficient and salutatory approach is a negotiated, recorded agreement, in which the parties decide on terms that fit the circumstances and generally benefit both neighbors.

Alternatively, parties sometimes resort to self-help, such as removing or destroying an encroachment or blocking access to the area in dispute. Self-help is strongly discouraged as a means of resolving property disputes in California.⁹ As the California Supreme Court observed, self-help is in conflict with the very idea of social order, and subjects the weaker to the arbitrary will or mistaken belief of the stronger.¹⁰

The third alternative is litigation. Typically, the landowner affected by an encroachment files suit for trespass or nuisance, seeking a mandatory injunction to remove the encroachment and possibly also damages. The encroaching party may cross-complain to quiet title to the encroachment, or in some cases, may initiate suit in the first place.¹¹ The court has the power in equity if it chooses to award relief to the landowner, even if no cross-complaint is filed.¹² Litigation between neighbors is inherently stressful, and in the case of encroachments, entails a high degree of unpredictability, as discussed below.

The sections that follow address three important and difficult aspects of California encroachment law: (i) the law of adverse possession/prescription as it relates to encroachments; (ii) the alternative approach to resolving encroachment issues by focusing on the equities; and (iii) the statute of limitations applicable to encroachment cases.

[Page 37]

II. ADVERSE POSSESSION AND PRESCRIPTION

When an encroachment is discovered, the initial focus is often the length of time that the encroachment has existed, to determine whether there are possible claims of adverse possession or prescription.

A party may acquire property by adverse possession by proving (i) possession under color of law or claim of right; (ii) actual, open and notorious occupation of the premises constituting reasonable notice to the true owner; (iii) possession which is adverse and hostile to the true owner; (iv) continuous possession for at least five years; and (v) payment of all property taxes assessed against that property during the five year period.¹³ To establish a prescriptive easement, a party must prove use of the property for at least five years, which use has been (a) open and notorious; (b) continuous and uninterrupted; and (iii) adverse to the true owner.¹⁴ A prescriptive easement does not ordinarily require the payment of real property taxes.

Proof of adverse possession gives a successful claimant title to the property in question. A successive claimant to a prescriptive easement, in contrast, gains only a right to make a specific use of someone else's property.¹⁵ This is consistent with the more general definition of an easement as the privilege to act on, or to the detriment of another's property.¹⁶ It gives a nonpossessory and restricted right to a specific use or activity upon another's property, which must be less than the right of ownership.¹⁷

Both adverse possession and prescriptive easement law in California date back to the original California codes enacted in 1872,¹⁸ when the population of California was in the neighborhood of 600,000 people¹⁹ and the society was primarily a rural one. Today, the law of prescription is justifiably described as "arcane," and its suitability to modern urban society is often questioned.²⁰ At times, the rules applicable to adverse possession and prescription seem counterintuitive or even paradoxical. Appellate decisions, especially as to prescriptive easements, often beg more questions than they answer.

One fairly recent development with respect to prescription is a line of cases holding that generally a prescriptive easement cannot be exclusive because an exclusive easement is equivalent to ownership of the burdened property, and it therefore requires proof of all the elements of adverse possession, including payment of property taxes.²¹

Many, if not most, encroachments by their nature entail exclusive use of a neighbor's property. Whether a party claiming a right to an encroachment can prove payment of taxes on the area in question is often problematic. A county assessor will typically testify that the normal practice is to appraise property based on legal descriptions and assessor's parcel maps, without actually performing a survey.²² On the other hand, there are several earlier cases suggesting the opposite, i.e., that with respect to encroachments, the county assessor normally values the land and improvements as visibly occupied by the parties.²³

Currently there is a statutory presumption that the "full cash value" for property tax purposes is the purchase price of the property, assuming an arms-length transaction.²⁴ If an encroachment is unknown to the parties at the time of purchase, the negotiated price and thus the full cash value for tax purposes would presumably reflect the value of the land and improvements as actually perceived by the parties at the time. If the encroachment is known, the price and full cash value would reflect a reduction in price for the encroachment and the cloud on title resulting from the encroachment.

The foregoing principles reflect no clear, predictable answer to the question of payment of taxes in the case of an encroachment. Thus, if one of the modern justifications for adverse possession and prescription law is to reduce litigation,²⁵ the complexity and uncertainty of proving payment of taxes on the disputed area of property in encroachment cases does not further that purpose.

Another important issue in encroachment cases is the availability of compensation in the form of damages as an alternative to requiring removal of the encroachment. Although antithetical to common sense and basic fairness, the current law in California is that a claimant who successfully establishes a prescriptive easement, cannot be ordered to compensate the property owner for the value of the easement. The claimant in effect obtains property rights, exercising what amounts to a private right of eminent domain, without paying anything. As inappropriate as this seems, the issue has been settled since 1984, when the California Supreme Court concluded in a split decision that "the statutes which define and validate prescriptive easements neither authorize nor contemplate an award to the underlying property owner for compensation for the reasonable value of the easement."²⁶ In the majority opinion, Justice Richardson questioned whether the concept of adverse possession squares with modern ideals in a sophisticated, congested, peaceful society at all. However, the court determined that requiring the payment of compensation clearly would be a matter for the legislature.²⁷ As it stands, "this method of obtaining land remains on the books, and if a party proves all five of the [requisite] elements [citation], he can claim title to another's land."²⁸

[Page 38]

Justice Grodin, concurring in the conclusion that any change was a matter for the legislature, made the following observation: "How, in today's urban society, litigation is reduced or the peace is preserved by allowing persons situated as are these plaintiffs to acquire rights in what is concededly the land of another without a cent of payment is beyond my comprehension."²⁹ Justice Reynosa, in dissent, went further to question the fundamental fairness of taking property rights from an innocent property owner by private eminent domain and giving them to a trespasser. His solution was not to wait for the legislature to require that the defendant pay fair compensation.³⁰ Now some thirty-two years later, the Supreme Court's invitation to the legislature has still not been accepted, leaving California law regarding prescriptive easements in a condition that almost no one considers reasonable or just in the context of modern society.

For those prescriptive easement claims that do not involve exclusive use, often the contested issue is whether the usage has been adverse, as opposed to permissive or a matter of neighborly accommodation.³¹

Because a judgment awarding a prescriptive easement requires one party to transfer valuable property rights to another without consideration...