"Squatters' rights" is another term for the legal doctrine of adverse possession. Under adverse possession, if a party spends sufficient time on another party's land and fulfills several other legal requirements, that party may eventually gain legal title to the land. The doctrine reflects the legal idea that owners who "sleep on their rights" jeopardize their ownership rights. Adverse possession requirements depend on state law; parties with specific questions should consult a local attorney.
Entry and Occupation
An adverse possessor must physically enter and occupy another party's land. Entry and occupation of a limited portion of the land may give title to the entire piece if the portion is large enough. The adverse possessor's occupation must also be exclusive, meaning that the possessor doesn't share the land with the owner or the public. However, multiple intruding parties may be able to adverse possess in concert, becoming tenants in common if they gain title.
An adverse possessor's use of the property must be hostile, meaning that the possessor has no permission from the owner to occupy the land. Should the possessor have permission but later attempt to become a hostile occupier, he must give the owner notice that he is now hostile. Parties who remain on the property after transferring it to someone else also must give notice of hostility. The majority of jurisdictions judge hostility objectively, looking at what a reasonable person would believe about permission, rather than the specific adverse possessor's actual belief.
Open and Notorious
An adverse possessor must occupy the property in an "open and notorious" manner. This means that the possessor's usage of the property must be obvious enough to give the owner notice of the possessor's trespassing. Typically, most states also require the possessor to use the land in the same manner as would the owner.
An adverse possessor must occupy and use the land "continuously" for the length of time specified by state adverse possession law. Continuous use is a heavily fact-based concept; for instance, if the true owner uses property only seasonally (such as a winter vacation home in Aspen), then the adverse possessor may have continuous use even if he only uses the property seasonally as well. Sometimes, different parties may tack, or add, adverse possession periods together, with the final adverse user actually acquiring property title. However, all of the adverse parties in a tacking case must have met all requirements of the doctrine.
If the true owner of the property becomes legally disabled, that disability may toll, or place on pause, the adverse possession period. Legal disabilities include the owner's insanity or imprisonment or the fact that the owner has not reached the age of majority in that state. However, some states have placed limits on the tolling period as well, usually at a twenty-year maximum.