A repeatedly misunderstood concept which occurs in a legal contests involving adverse possession is the difference between perfection and recognition.
Perfection is what happens in the vast majority of cases when all of the elements of adverse possession have been satisfied. For my jurisdiction of Washington State, this is actual possession which is (a) open and notorious; (b) hostile; and (c) exclusive; held (d) continuously for (3) the statutory period of 10 years.
OK, that’s great. But, now let’s remember that in court – regardless if the claimant of adverse possessor is the plaintiff or the defendant – the claimant must carry the burden of proving that this perfection has occurred.
The result may be that the adverse possessor is indeed the owner of the land. But until the neighbor who holds title either vocationally acknowledges this or a court recognizes it, the claimant of adverse possessor’s assessment of the situation is either invalid (i.e. the right has not been perfected) or the title holder is indeed, still the recognized owner of the real property.
Regardless, the claimant of adverse possession doesn’t have all that much of substance … EXCEPT a cloud on the title holder’s property. This cloud on title becomes of greater strength (i.e. leverage) when the title holder is seeking to sell his or her real property.
The reason for this is fairly formulaic. If there is a cloud on title, the title holder is generally not in a position to secure title insurance. And when there is no ability to secure title insurance, no mortgage lender will finance the house. Finally, without the ability for real property purchasers to secure financing, the seller simply doesn’t have much – if any – market for the real property.
It is because of the difference between perfection and recognition that choosing a legal approach to resolving a boundary dispute with a neighbor can very quickly become prohibitively expensive. So, before charging in, make sure to have a consult with someone who really understands how to diagnose and resolve boundary disputes.