Legislature(2001 - 2002)
03/05/2002 01:38 PM Senate L&C
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 309-ADVERSE POSSESSION
SENATOR GENE THERRIAULT, sponsor of SB 309, said he was
approached after the session began about this issue. Adverse
possession is a doctrine under which a person - even a squatter
acting in bad faith - can take another's property without
compensation by simply possessing it. Although the doctrine began
in the Middle Ages under circumstances that do not apply today,
it creates an interesting policy issue so he agreed to introduce
the bill.
SB 309 limits the current statute pertaining to adverse
possession to two narrow circumstances: (1) where a person has,
in good faith, occupied property under color of title for 20
years; and (2) where a property owner occupies property adjacent
to his own land under a reasonable, good-faith error over the
actual boundaries of his property. After reading about the
history of the doctrine, he decided he falls on the side of the
private property owner. Arguably, Alaska has the largest private
property owners in the nation, those being the Native
corporations. The old doctrine that requires a property owner to
keep tabs on who might be squatting on the land might put the
owner at risk of losing a portion of that property. He said some
of his constituents own property in locations that they are
unable to visit regularly. Under current doctrine, they must make
sure their property has not been encroached upon, otherwise risk
losing it.
1:52 p.m.
SENATOR LEMAN asked the significance of increasing the timeframe
from seven to 20 years.
SENATOR THERRIAULT told members that 20 years is an arbitrary
timeframe that was suggested to him but that he is willing to
consider shortening that period.
SENATOR LEMAN said he would like to hear testimony on that
question. He believes the other provisions are reasonable and
will help limit the application of adverse possession.
CHAIRMAN STEVENS said he shares Senator Leman's concern.
The committee took a brief at-ease.
SENATOR THERRIAULT informed members, regarding the selection of
20 years, as people from England started to purchase land when
the country was established, it was often difficult to journey
across the ocean to check on the land so the New England states
established a 20 year period of time. With the Manifest Destiny
movement, the nation wanted land to be put into productive use.,
The time period was shortened to allow another to take possession
of the land if the titleholder was not using it. He noted that
circumstances have changed so the shorter time period no longer
makes sense. A 20-year time period still exists in a number of
the New England states.
CHAIRMAN STEVENS suggested basing the timeframe on Henry VIII's
days when it was 60 years.
SENATOR LEMAN expressed concern about copying what the New
England states are doing.
MR. BRYAN MERRELL, state counsel and underwriter for First
America Title Insurance Company, informed members that SB 309 is
a double-edged sword for First America. For certain types of
title insurance policies, title insurers issue coverage against
adverse possession to assure policyholders that no one can claim
adverse possession to their property. First America does a risk
evaluation using surveys and questions directed to the landowners
involved in the transaction. In essence, SB 309 is somewhat
favorable to First America because it will make it more difficult
for someone to raise an issue of adverse possession. However, a
cause for concern is clearing or correcting title defects that
may have occurred in the past. One of First America's better
allies for assisting private landowners who are attempting to
insure titled real property is to suggest, in cases where old
deeds of records exist but the people who may claim those
interests cannot be tracked down or are not interested in
clearing the record, to use the doctrine of adverse possession.
Likewise, there are times when those interests may have been
missed or in which the underwriter decides to take a risk and
provide insurance. If they do come up during a title search, the
underwriter can use adverse possession as a means to clear the
title. The restrictive nature of SB 311 will make that process
harder for people with those concerns. In his experience as a
title examiner, it is a good tool to use to fix some title
problems.
Regarding the timeframe, MR. MERRELL said shortening it from 20
to 10 years would help. Some of the aspects involved in the
codification of the statute would be required by the Alaska
Supreme Court to claim adverse possession, for example, the
concept of having claimed the right in an open and hostile way
and notoriously, which is what the Supreme Court has determined.
Some of the other aspects, particularly the concept of paying for
the property that one is adversely possessing, are unusual. He
has not been able to do a survey to figure out where other states
fall on this issue. But, in his experience, he cannot recall any
other states being this restrictive as to the statute.
MR. MERRELL asked members to consider the need for some folks to
be able to clear title in a state like Alaska where there are a
lot of old interests, errors and flaws in the recording system
that make it difficult to get clear title.
CHAIRMAN STEVENS thanked Mr. Merrell and called Mr. Dick and Mr.
Tillinghast.
MR. RUSSELL DICK, Natural Resources Manager for Sealaska
Corporation, stated strong support of SB 309. Native corporations
established under the Alaska Native Claims Settlement Act (ANCSA)
are the largest private landowners in the state of Alaska.
Sealaska is the largest private property landowner in the
Southeast region. He noted he would address SB 309 from two
fronts: ANCSA conveyed lands and non-ANCSA lands.
MR. DICK said that lands conveyed to Native corporations served
two purposes: (1) to settle Alaska Natives aboriginal claims; and
(2) to meet the social, cultural and economic needs of Natives.
In that sense, these lands are the foundation of existence of
Native peoples and Native corporations. Recognizing that,
Congress imposed a prohibition of adverse claims against Native
lands as long as the lands remained in an undeveloped state.
Although that was effective when ANCSA was first enacted, it is
inadequate now. He does not believe Congress recognized how
expansive these land bases would become. Congress didn't consider
the degree of development on these lands nor the burden created
by having to actively patrol large remote landholdings. Sealaska
Corporation has 290,000 acres of land with an entitlement, which
will total upwards of 350,000 acres spread throughout Southeast
Alaska. If development is minimal or occurs in specific areas,
the cost of patrolling the lands will be burdensome and an
economic waste that serves no valid public policy.
MR. DICK informed members that Sealaska Corporation has also
purchased non-ANSCA lands. These types of lands do not maintain
the same prohibition of adverse claims so that adverse possession
can occur regardless of whether or not they are developed.
Sealaska purchased a piece of property in Cordova on which a
squatter built a house. Sealaska had to spend considerable time
and money to evict the squatter. Had Sealaska not known the
squatter was there, a tackings issue may have arisen. In other
words, if the squatter had lived on the land for six years at the
time of the purchase, that time would apply toward the seven
years required for adverse possession.
MR. DICK stated that the State of Alaska has always respected
private property rights because there is so little private
property here. The doctrine of adverse possession seems to be
inconsistent with the recognition of the importance of protecting
and preserving private property ownership and its associated
rights. The only lands subject to adverse possession in Alaska
are private property lands. He repeated that Sealaska is very
supportive of SB 309 as it goes a long way toward protecting the
rights of private property landowners.
MR. JON TILLINGHAST, legal counsel to Sealaska, told committee
members that New Hampshire is among the New England states that
use or used 20 years. He said in his discussion about adverse
possession, he will put two types of claims to the side - the
first being claims premised on color of title, meaning a person
has a deed with a problem. Those are the claims Mr. Merrell spoke
of and SB 309 preserves those claims. The second type of claims
he would like to put aside are those involving a boundary
dispute, for example when a property owner built a fence in the
wrong location 20 years earlier. SB 309 puts new restrictions on
bringing those kinds of claims. For example, it says a person
must possess the property for 20 years rather than seven.
MR. TILLINGHAST said the heart of the bill is in Section 1, which
is aimed at a person one could only call a squatter; a person
with no claim to title who is simply there with the hope of
staying long enough to acquire the title. He said he will not
review the historical reasons for adverse possession, but
explained the only justification at this time for a squatter law
is that a squatter will make more productive use of the land than
the absentee landowner. He noted that modern courts have upheld
that doctrine. He finds the concept frightening because the state
is saying that if a private landowner is not making a
sufficiently socially valuable use of his or her private
property, it will be given to someone else.
MR. TILLINGHAST said the fact that a person cannot get adverse
possession from the state or federal government is well
established. The state and federal governments have argued that
it would be too burdensome to police property they own. In
Alaska, ANCSA regional corporations own roughly 80 million acres
of land: those corporations have precisely the same problem the
state has yet the state wishes to maintain its immunity from
adverse possession but maintain its right to squat on private
property without paying. That philosophy reflects a different
value judgment than Sealaska, as to the relative sanctity of
public property ownership and private property ownership. He
offered to answer questions.
SENATOR LEMAN asked Mr. Tillinghast to clarify whether there is a
difference between ANCSA and non-ANCSA property in the
application of adverse possession.
MR. TILLINGHAST explained that ANCSA protects ANCSA property from
being divested by adverse possession as long as it remains
undeveloped.
SENATOR LEMAN asked if, "...somebody could put that road in
adversely?"
MR. TILLINGHAST said he does not know the answer to that
question.
MR. DICK said a more likely scenario is that Sealaska might build
an advance logging road which would provide a convenient way for
a squatter to drive in.
SENATOR LEMAN asked if that ANCSA land would not have the same
protection as adjoining state or federal land.
MR. DICK said that is correct.
CHAIRMAN STEVENS asked how many cases of adverse possession have
been claimed against ANCSA land in the past.
MR. DICK said he knows of two cases with Sealaska.
CHAIRMAN STEVENS noted no representation from other Native
corporations in the room and then asked Mr. Dick if he is aware
of positions from any other corporations on this legislation.
MR. DICK said he is not.
CHAIRMAN STEVENS said he would like to get more input from large
landowners and discuss the 20-year issue before taking action on
the bill.
MR. BILL CUMMINGS, assistant attorney general, Department of Law
(DOL), said DOL is not unmindful of the problems with adverse
possession that Sealaska and other ANCSA corporations have with
lands they acquire and might minimally develop. However, DOL is
concerned that SB 309 stands the whole notion of adverse
possession on its head. In some situations, it could work to the
public's detriment and could be used to commit outrages. DOL's
biggest concern is the large number of highway rights-of-way the
state claims under adverse possession. The state is currently
embarking on a program called "gravel to paving" in which the
state is paving many gravel roads in rural areas. The presumption
is that the state has been doing this for 20 to 30 years without
any objections so the state is assuming it has title by adverse
possession. If SB 309 comes to pass, the state will have to re-
examine its presumption and possibly kill the program. Another
example is a state program to build roads and put in drainage
culverts. The culverts are located within the highway right-of-
way and carry water away from the highway. The state has never
acquired any easements below the outfall so, if SB 309 was
enacted, the state would have to go back and redo engineering
decisions that were made up to 50 years ago, render compensation,
all after everyone in the chain of title has acquiesced to what
the state has been doing to carry off the drainage water. Mr.
Cummings said the state needs some way to address these very
valid public concerns.
MR. CUMMINGS said DOL's final concern is that SB 309 could be
used to the detriment of the public. He cited a case named Veazey
(ph) v. Green, (35 P.3d 14) and said under SB 309, the plaintiff
would have lost. The facts of the case are as follows: a woman
was given a tract of land by her grandmother but the deed was not
transferred; the woman spent 10 years building a house, clearing
the land and planting on it; then the grandmother advanced in age
and lost some of her mental faculties and went into a land
transaction with a developer who acquired the property. The woman
would have lost her 10 years of labor under this bill. He offered
to answer questions.
SENATOR LEMAN asked, regarding the drainage issue, if one goes
back 30 or 40 years when some of the engineering decisions were
made, whether they would be barred from claim by Section 4 of the
bill.
MR. CUMMINGS said it is not clear. The rules that are used now
when one combines the 10 years of use along with the rules of
inverse condemnation, would imply the state took it a long time
ago so nothing can be done about it now. However, under SB 309,
particularly Section 1, anyone could bring an action at any time.
He noted the need for legislation that is much more precise to
protect the state's interests on the culverts.
SENATOR LEMAN suggested that Mr. Cummings work with committee
members and the sponsor on ways to find ways to address the
issues he has raised.
CHAIRMAN STEVENS asked Mr. Cummings his position on SB 309.
MR. CUMMINGS said DOL is opposed to the bill because of what it
does to the state's interests.
CHAIRMAN STEVENS asked about DOL's position on applying adverse
protection requirements to protect private landownership.
MR. CUMMINGS replied there is room for improvement as long as the
changes are not too burdensome or allow for outrages.
TAPE 02-10, SIDE B
CHAIRMAN STEVENS repeated his desire to hold the bill and request
positions from other large landowners.
SENATOR THERRIAULT agreed and said that this is his first time
dealing with this area of the statutes. He said he is willing to
discuss the matter further and find language to address the
issues raised.
SENATOR LEMAN expressed concern that SB 309 not overreach and
create unintended difficulties.
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