Category: Real Estate

75 years of trespassing will not a prescriptive easement make, says the court of appeals

The legal doctrine of adverse possession generates a lot of legal folklore.  If you fence in your neighbor’s property for X years, does it become yours?  In some states, yes; in others, no.  In Oregon the answer is “it depends.”

The kissing cousin of adverse possession is the prescriptive easement.  If you use your neighbor’s property for a driveway for X years without permission, do you acquire a permanent easement to continue to use it?  In some states, yes; in others, no.  In Oregon the answer is — you guessed it — “it depends.”  One of the facts on which the answer depends is whether your use was adverse enough for the neighbor to notice that you were trespassing.  If your use wasn’t so obvious that your neighbor must have noticed, then your use isn’t adverse enough to ripen into a prescriptive easement.  The Oregon court of appeals said this month that if your neighbor is a railroad, it might not be expected to notice that you’re trespassing, even if you’ve been trespassing for 75 years.  Read Dean Alterman’s article about the case on LinkedIn here.

Tenants: negotiate the default clause, not the late fee

Here’s a lease tip for small tenants: don’t argue about the late fee, but read the default clause carefully. Why? It’s not worth your time to negotiate a 10% late fee down to 5%. If you spend $400 of your time or your lawyer’s time arguing with the landlord and the monthly rent is $2000, then you have to be late with the rent four times before you break even.  Being late with the rent is a bad way to make up your business’s overhead costs.

You have a lot more to lose if the landlord can lock you out for a default. Why negotiate default and not the late charge? If you don’t pay on time and incur a late fee, you’re still in business. But if the landlord can lock you out without warning if you don’t pay on time, you’re out of business. Insist on a notice and a cure period before the landlord can change the locks. If you don’t, and if the landlord takes a dislike to you, then the landlord can call a minor breach a default, lock the doors on your business, leaving you without income but on the hook to pay rent until the landlord finds another tenant.

Propose a “three-strikes” clause: for the first two late payments in a 12-month period, the landlord must send you a notice of default and allow you a few days to pay the back rent and a late charge. Only with the third strike – the third late payment – can the landlord lock you out.