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Small Pond, Big Problem
by Ron Davis

The new owners of a Florida shopping center may have to settle for possession without an important part of the property.

The shopping center is Lafayette Place in Tallahassee, and the new owners gained the property through foreclosure. But years later they learned that a parcel of land that contains a retention pond, used for storm-water drainage, was not included in the legal description of the mortgage they held. Ownership of that parcel remained in the name of the center’s previous owner.

When informed of the situation, the previous owner asserted a claim to the retention pond. In response, the current owners sued to gain legal possession of that property. In so doing, they contended that on their property tax returns, reference to the retention pond was included within the description of Lafayette Place. They never produced those returns as evidence, however.

On the other hand, the previous owner could not verify that the retention pond and the shopping center are two separate parcels for tax purposes. (The previous owner testified that he was not taxed on the property because the retention-pond parcel was so small that no tax was levied.)

A Florida court ruled in favor of the new owners of the shopping center, relying on the previous owner’s testimony that he had not paid taxes on the property containing the retention pond. Therefore, the judge reasoned, the new owners acquired the property through “adverse possession,” which under Florida law essentially grants ownership after seven years to an unchallenged occupier of property.

The previous owner appealed that ruling.

A Florida appellate court reversed the lower court ruling, explaining that the claim of the new owners of the shopping center “cannot be established by loose, uncertain testimony which necessitates resort to mere conjecture. To establish adverse possession without color of title, there must be a showing of payment of all taxes by proper legal description for the tax period. The requirements of the law were not met in this case. Reliance solely on the bare sworn statements of its representatives was clearly insufficient to establish adverse possession here.” (Candler Holdings Limited I v. Watch Omega Holdings, L.P., 2007 WL 216304 [Fla.App, 1 Dist.])

Decision: January 2007
Published: February 2007



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