Alabama Squatter Law: How “Squatters’ Rights” and Adverse Possession Can Derail a Real Estate Closing (and What Buyers Should Do Before Closing Day) 

In Alabama, “squatters’ rights” usually refers to adverse possession—a legal doctrine where long-term, open, continuous occupation can evolve into a title claim. 

In a real estate closing, this can trigger title insurance exceptions, lender delays, or possession disputes.

The closing risk is practical: an unexpected occupant, a long-used fence line, or a “we’ve always used that driveway” situation can trigger title insurance exceptions, lender hesitation, and delays—or worse, force you to close into a possession dispute.

This guide explains how adverse possession generally works in Alabama, why the 20-year vs. 10-year conversation matters during due diligence, and how these issues show up in real transactions. 

Most importantly, you’ll get a pre-closing buyer checklist—what to verify during the title and survey reviews and the final walkthrough—so you can protect your purchase before funds are wired and the deed is recorded.

Key Takeaways 

• Alabama adverse possession is commonly discussed as 20 years, with a 10-year statutory path in specific situations.
• “Hostile” typically means without permission, not aggressive behavior.
• Occupancy/encroachment issues can trigger title exceptions and delay funding.
• Buyers should treat it as pre-closing due diligence.
• Use a closing-focused checklist to reduce surprises.

“Squatters’ Rights” In Alabama: What The Term Actually Refers To

In Alabama, “squatters’ rights” usually refers to adverse possession—a way a non-owner might claim rights after long-term, visible, continuous occupancy without permission. 

For closings, the key question is whether the facts create a credible dispute that impacts marketable title or possession.

Squatter, Trespasser, Tenant: Labels That Change The Legal Path

The label you use for the person on the property changes your legal path. A trespasser lacks permission and has no color of title. 

If the person is truly a trespasser with no tenancy claim, removal may involve law enforcement in clear cases, but many situations require a civil process to restore possession. 

If the person claims a tenancy or other right to be there, you typically must use the appropriate court process (often unlawful detainer/eviction or ejectment, depending on the facts).

A squatter tries to treat the property as their own. To actually become an owner under adverse possession, the squatter has to meet Alabama’s legal tests—continuous, exclusive, open, notorious, and hostile possession for the required period. If a squatter proves these, they might eventually claim title.

A tenant has permission to be there. Written leases or rent payments show consent and defeat “hostile possession.” 

If there’s a lease, you have to follow landlord-tenant eviction rules, not just trespass removal. Always check paperwork, receipts, or messages before you decide someone’s a squatter.

What “Hostile Possession” Means In Alabama

“Hostile possession” isn’t about violence. It just means the occupant doesn’t have permission and acts as if they were the owner. In Alabama, courts look at what the occupant actually does: posting signs, making repairs, paying taxes, or keeping the real owner out.

Document interactions carefully. If the occupant ever got permission—even just verbally—that can break the hostility element and block an adverse possession claim. But if they keep acting like the owner for years, their position gets stronger.

In Alabama, the required timeframe is commonly 20 years by prescription, or 10 years under the statutory adverse possession rules when specific conditions apply (such as recorded color of title, tax listing/payment, or descent/devise).

Check the exact period and see if “color of title” or tax payments are required before you worry about an adverse possession claim.

Why Closings Fail Over Possession, Not Just Paper Title

A deed only shows who’s on record; it doesn’t guarantee you’ll get physical possession. If someone’s living there, a closing can stall until you resolve it. When someone else is in possession, title insurers often add exceptions (or require curative steps), and lenders may delay funding until possession and underwriting concerns are addressed.

Order a current possession and title search, plus do a physical inspection before closing. If an occupant claims adverse possession, you might face litigation or need to negotiate a buyout. 

Quick fixes like post-closing eviction can blow up in your face, causing foreclosure or title insurance headaches.

Protect yourself by requiring seller warranties, obtaining a possession affidavit at closing, and ensuring the seller can actually deliver vacant possession. If there’s an adverse possession claim, talk to an attorney and alert your title company so you don’t close on a property with a ticking time bomb.

Atkinson Law, P.C. can review your title commitment, survey, and occupancy risks before closing—so you don’t buy into a squatter, tenant, or boundary dispute.

Alabama’s Two Common Timeframes: 20-Year Prescription Vs. 10-Year Statutory

Alabama commonly recognizes adverse possession by prescription (20 years) and statutory adverse possession (10 years) when additional conditions exist—such as recorded color of title, tax listing/payment, or descent/devise. 

The difference matters because a plausible 10-year claim can raise title and closing risk sooner.

The 20-Year “Prescription” Route In Plain English

Prescription in Alabama means someone’s had the land for at least 20 years without a break. If a squatter makes continuous, exclusive, and adverse use of the property for 20 years, they can claim ownership. 

Continuous means they use it like an owner would—farming, living there, or maintaining it—not just dropping by now and then.

Exclusive means they act as if they’re the only owners, keeping the real owner out. Their use has to be open and obvious, so a reasonable owner would notice. 

A claim of right—where the squatter treats the land as theirs, even if they’re wrong—supports prescription. Check deeds, tax records, and maintenance or utility bills to see if the 20-year story adds up.

The 10-Year Statutory Route Under Ala. Code § 6-5-200

The 10-year statutory route is faster but needs stricter proof. The possessor must show actual, open, notorious, exclusive, and continuous possession for ten years “against the whole world.” The law usually expects clear proof of a claim of right or color of title.

Check if the possessor paid property taxes, improved the land, or recorded anything. These can prove a claim of right. 

The 10-year claim falls apart if the true owner interrupted possession, gave permission, or if the possession was secret. Look for complaints, notices, or legal interruptions before closing.

The Five Elements Buyers Should Understand Before Closing

Before closing, check if any adverse possessor meets these five elements:

• Actual possession: physical use (living, fencing, farming).
• Open and notorious: use that’s visible to the owner or public.
• Exclusive possession: acting as sole owner.
• Continuous possession: no breaks for the required period.
• Claim of right (or color of title in some cases): acting like the owner, even if mistaken.

Gather evidence: photos, utility bills, affidavits, tax payments, and property records. Ask the seller for a sworn statement regarding any disputes, and obtain a current title search that flags potential adverse claims. 

If you spot signs of an ongoing possession claim, delay closing until it’s cleared or get title insurance exceptions removed.

Quick Comparison Table: Which Path Seems More Plausible?

Factor	20-Year Prescription	10-Year Statutory (Ala. Code § 6-5-200)
Time required	20 years	10 years
Emphasis	Long uninterrupted possession	Legal elements and claim of right
Proof weight	Observable long-term use, tax records helpful	Stronger need for documents, tax payments, and improvements
Easier to challenge	Harder if a long history exists	Easier to defeat with evidence of interruption or permission
Typical red flags for buyers	Old fences, long-term utility records	Recent improvements, paid taxes, and recorded affidavits

Use this table to guess which route a possessor might use. If the evidence points to either one, get legal advice and demand clear title protections before you close.

How Adverse Possession Creates Real Closing Risk In Alabama

Adverse possession issues derail closings when they create uncertainty about who has possessory rights or where the true boundary lies. 

That uncertainty can lead to title exceptions, insurer hesitation, lender delays, or post-close litigation. The goal is to identify risk early enough to fix it pre-close.

Title Insurance Red Flags That Trigger Exceptions

Title commitments sometimes show exceptions that matter: gaps in the chain of title, unrecorded easements, or sketchy quitclaims. Watch for phrases like “unknown heirs,” “claims of parties in possession,” or a missing deed between prior owners. 

These let a title company limit coverage or add exceptions you’ll need to fix before closing.

If a policy mentions “claims of adverse possession,” get a written explanation from the insurer and demand curative steps. Your lender will likely require a clear title; unresolved exceptions can delay funding or require escrow holdbacks. 

Push the seller for a title cure, order curative work, or ask for enhanced ALTA coverage that narrows exceptions.

Survey Problems That Can Signal A Boundary Claim

A current, certified survey can reveal boundary encroachments, fences outside the plotted lines, or improvements that spill onto a neighbor’s property. Look for survey notes like “occupation shown” or lines that don’t match the deed. 

These are warning signs of possible adverse possession if someone has used the land openly for the statutory period.

Ask your surveyor to mark occupied areas and compare meters, driveways, and structures to deed corners. 

If the survey shows problems, request corrective deeds, boundary agreements, or a quiet title action before closing. Lenders sometimes refuse to close if the survey uncovers unresolved boundary issues.

Occupancy Problems That Can Stop A Closing Cold

If a third party actually lives in or uses the property, that’s the biggest risk. Watch for utilities under another name, personal items, or recent mail addressed to someone who’s not the owner. 

In Alabama, continuous, open, and notorious use can give rise to a claim; occupancy right up to closing can scare off title insurers and lenders.

If you find people on the property, figure out their legal status and how long they’ve been there. Make the seller remove them and show proof—eviction docs, termination letters, or an affidavit of possession.

 If removal can’t happen fast, postpone closing until a court order or recorded document clears the title. Failing to address occupancy can lead your lender to withhold funds and kill the deal.

Unsure who’s living on the property or what the survey implies? Get a pre-closing risk check with Atkinson Law, P.C. before you sign. Contact us now.

Pre-Closing Buyer Checklist For Alabama Purchases

Buyers reduce risk by verifying possession, reviewing the title commitment, and checking the survey early. If something looks off, delay closing or structure the deal so the seller resolves it before recording.

Confirm Who Is In Possession Before The Final Walkthrough

Physically check who’s in the property during your final walkthrough. Look for signs: furniture, personal items, utilities on, and recent activity. Ask the seller or agent who lives there, and if anyone else has access or keys.

If you find someone who isn’t the seller, stop the process. Take photos, note names, and alert your agent and title officer right away so they can confirm who’s in possession and advise whether you should even close.

Require A Written Possession Representation From The Seller

Ask the seller for a signed, dated statement that spells out who’ll be in possession at closing. If the contract calls for a vacancy, confirm it in writing as well.

Make this representation a condition of closing. Include remedies for breach, like credits, repair allowances, or escrow holds—just in case things go sideways.

Don’t just take their word for it. Insist that the seller disclose any leases, licenses, or occupancy agreements in writing.

This helps you avoid surprises from tenants or invitees who might stick around. It also documents changes in intent and possession, making it much harder for squatters or adverse possession claims to surface later.

Request An Estoppel Or Occupant Statement If Anyone Claims A Right To Stay

If someone claims a right to stay, they must provide an estoppel certificate or an occupant statement. 

The form should list the occupant’s name, the reason they’re there (lease, license, family, etc.), start date, payment terms, and whether they claim any long-term use or improvements.

Use this statement to spot possible adverse possession risks, like uninterrupted use or improvements by a non-owner. 

If the occupant refuses to sign, that’s a big red flag—talk to your title company or attorney about holding off on closing.

Review The Title Commitment For “Party In Possession” Exceptions

Read the title commitment closely for “party in possession” exceptions. These can flag someone who claims to occupy the land—maybe a tenant, maybe a squatter, or even an ongoing dispute that the title insurer won’t cover.

If you see a party in possession, get proof that their occupancy ended or an agreement resolving the claim before closing. 

Ask the title company to clear or insure over the exception, or require an escrow holdback until the issue gets sorted out.

Review The Survey For Encroachments And “Used Land” Patterns

Take a close look at the survey for encroachments, fences, driveways, or other signs that others have used on the property. Patterns like a neighbor’s path or a shed partly on your lot can support future adverse possession claims if you ignore them.

Have your surveyor mark disputed boundaries and write up any longstanding use patterns. 

Before closing, require fixes, removal, or a boundary agreement—or get an indemnity from the seller to protect you from future claims.

Use An Escrow Holdback When Possession Is Not Clean On Closing Day

If you’re still dealing with possession issues at closing, insist on an escrow holdback. Set a dollar amount and spell out exactly what needs to happen for release, like written proof of vacancy, recorded termination, or payment to clear encumbrances.

Lay out timelines and remedies in the escrow agreement. Holdbacks protect your money while the title company or seller clears up possession, keeps squatters out, and addresses adverse possession risks—without forcing you to delay closing.

If You Discover An Unauthorized Occupant Before Closing: What To Do

If someone is living there unexpectedly, avoid closing “hoping it works out.” Your best options are to delay closing until vacant possession is delivered, require the seller to resolve, or negotiate an escrow/holdback with clear written conditions.

Option 1: Delay Closing Until Vacant Possession Is Verified

If someone’s still in the property, insist the seller deliver vacant possession before you close. Ask your agent and closing attorney to check the property the morning of closing and right before money changes hands. Don’t just trust the seller’s word.

Put everything in writing. Use a written addendum that makes the closing contingent on a signed seller affidavit confirming that no one is there and permitting you to enter. Make sure the title company accepts it before they issue a policy.

Check utilities, locks, and keys. Ask for proof that locks were changed and utilities are on or transferred so you can inspect. If you can’t verify the vacancy, don’t fund the deal until you’re sure it’s valid.

Option 2: Make Seller Responsible For Legal Removal Before Recording

Require the seller to remove the occupant through formal eviction or a written surrender before you take title. Spell this out in the purchase contract or a separate indemnity agreement signed by the seller.

Ask for proof—court-ordered eviction, a notarized quitclaim, or a surrender signed by the occupant. 

The seller should provide you with copies of the filings, sheriff’s returns, or a signed release indicating that the occupant relinquished possession.

Include a seller-paid legal fee clause. The seller should cover all costs—attorney fees, court or sheriff fees—and clear any related liens or judgments before title records in your name.

Option 3: Close With A Holdback Only If Terms Are Clear And Enforceable

If the seller can’t or won’t remove the occupant before closing, you might agree to close with a holdback of funds to cover removal costs. Use a written escrow agreement with the title company or an attorney as escrow agent.

Define exactly what triggers release: what proof ends the holdback, how long funds stay put, and which invoices or court documents do the trick. Spell out the amounts and require the seller to post additional security if costs exceed the holdback.

Limit your risk. Make the seller indemnify and defend you against any claims by the occupant. 

Ask for a mechanic’s lien-free affidavit and updated liability insurance naming you as an additional insured until the holdback is released.

Avoid Self-Help Actions That Create Liability

Don’t try to remove someone by force, change the locks, or do a lockout on your own. Alabama law—and local courts—often see self-help as unlawful eviction. That can open you up to criminal or civil claims. It can also drag out your closing.

Skip direct negotiations with the occupant unless your attorney is there to supervise and put everything in writing. Verbal deals? They’re risky, and honestly, tough to enforce if things go sideways.

Stick with the legal process. File for eviction if needed, use the sheriff’s services, and get written agreements with the seller—always handled by your lawyer. That’s what keeps your legal protections intact and helps avoid headaches after closing.

Protect your Alabama closing from last-minute surprises—schedule a consultation today to confirm a clean title and deliverable possession with Atkinson Law, P.C.

Frequently Asked Questions 

How long does someone have to occupy property to claim adverse possession in Alabama?

In Alabama, adverse possession is commonly discussed as 20 years (prescription). Still, some claims may mature in 10 years under statutory conditions, such as a recorded color of title, tax listing/payment, or descent/devise. The facts and documentation drive the outcome.

Does paying property taxes automatically give squatters rights in Alabama?

No. Paying taxes alone typically doesn’t “automatically” transfer ownership. Tax listing/payment can be relevant under Alabama’s statutory adverse possession framework. However, the claimant still generally must prove the core possession elements (open, exclusive, hostile, continuous) for the required period.

What does “hostile possession” mean in Alabama adverse possession?

“Hostile” usually means the occupant is on the property without the owner’s permission and is acting as if they have a right to possess it. It does not require aggression. If the owner gave permission, that often defeats the “hostile” element unless circumstances change clearly.

Can a buyer still close on a property in Alabama if someone is living there?

Sometimes, but it can create a serious risk. An occupant can trigger title exceptions and possession disputes, and your leverage drops after closing. Many buyers either delay closing until vacant possession is delivered or use written agreements and escrow arrangements to manage risk.

Does selling the property “reset the clock” on adverse possession in Alabama?

Not necessarily. In many adverse possession frameworks, the relevant issue is continuous possession over time and whether periods can be “tacked” together based on facts and legal requirements. If you suspect a risk, address it with counsel and title before closing.

Is a boundary fence or driveway encroachment part of “squatter’s rights”?

It can be related. Long-standing, open use of disputed land (such as a fence line or driveway) can give rise to adverse possession or boundary dispute issues, which may surface during surveys or title review. Treat encroachments as closing risks, not cosmetic issues.

What’s the single best way to reduce squatter/adverse possession risk before closing?

Confirm possession and boundaries early: verify who occupies the property, document vacancy/possession representations in writing, review the title commitment carefully, and examine the survey for encroachments. If anything looks unclear, pause and address it before recording.