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What’s Mine Might Be, Legally, Yours

By: Erin Bowen Welch

In its March 19, 2018 unanimous opinion, Marlette Auto Wash, LLC v Van Dyke SC Properties, LLC, the Michigan Supreme Court affirmed certain principles of Michigan case law regarding adverse possession and prescriptive easements, which principles could have real consequences for purchasers of real property and title insurance companies.

Marlette involved a dispute between neighboring property owners regarding the use of a shopping center parking lot for access to the adjoining parcel without the benefit of a recorded easement.  Proofs offered at trial showed that a previous owner used the adjacent parking lot for access to and from its parcel for more than fifteen years (the statutory period) without an agreement between the neighboring property owners.  No previous owner took legal action to establish record title of such easement.

The Marlette Court rejected the argument that a vested right to a prescriptive easement does not become an easement that runs with the land unless a determination has been made by a court that all elements to a prescriptive easement claim have been satisfied.  Instead, the Court held:

  • Open, notorious, adverse, and continuous use of real property for the relevant statutory period creates a prescriptive easement that is appurtenant and runs with the land, without the need for the claimant to show privity of estate with the prior owner; and
  • A prior owner of a dominant estate is not required to take legal action to claim the easement in order for a vested prescriptive easement to exist.

While the legal concepts of adverse possession and prescriptive easements may be taught in Real Property 101, the Court’s opinion in Marlette clarifies certain ideas and nuances that are important to individuals purchasing or developing real estate and to the title companies insuring such interests.  Removing the “legalese” from the Court’s holding in Marlette, the Court confirmed that a party gains title by adverse possession when the statutory period expires, not when a legal action regarding title is brought.  Under this theory, a purchaser of real property may not have public, record notice of a prescriptive easement or property lost through adverse possession.  A prior owner may have satisfied the elements for a prescriptive easement or claim of adverse possession, obviating the need for a current possessor to meet such requirements, even if the current possessor has only recently begun to adversely use the property.  As suggested by the Michigan Real Property Law Section in its amicus brief, this position could “give rise to unrecorded easements that are not known and may well not be ascertainable currently.”  In Marlette, however, the Court rejected arguments that its holding would create “secret” easements since a claim of adverse possession is only successful if the use in question is “so open, visible, and notorious as to raise the presumption of notice to the world that the right of the true owner is invaded intentionally.”

For purchasers and developers, the Marlette opinion reaffirms the importance of thorough due diligence prior to purchasing real property.  Ordering a title commitment and a survey of the property may not reveal an adverse use of the property or the extent of such use.  While shared points of entry, worn paths, or encroaching features may provide clues, a site visit and further investigation as to any potential adverse uses may be necessary and prudent to avoid unanticipated negative consequences.