Tax Deed vs. Adverse Possession
For more than 36 years, Hauxwell had continuously, actually, openly, notoriously, and exclusively possessed the 21 acres next door to her home. In 2010, Hanzlick acquired a tax deed cutting off the fee interest of the prior record owner. Hauxwell sought to quiet title on the basis of her adverse possession and Hanzlick counterclaimed for ejectment.
The trial court determined that Hauxwell’s adverse possession entitled her to a statutory notice that had not been given, and quieted title in her favor. The Nebraska Supreme Court disagreed. Hauxwell v. Henning, 291 Neb. 1 (June 5, 2015).
The Supreme Court zeroed in on Hauxwell’s lack of standing to challenge the tax sale. The tax statutes provide that “no person shall be permitted to question the title acquired by a treasurer’s deed without first showing that … all taxes due upon the property had been paid by such person.” The evidence established neither payment of the taxes nor tender thereof, leaving Hauxwell without standing.
Some states require payment of taxes as a statutory requirement for establishing adverse possession. While Nebraska does not, failure of an adverse possessor to do so leaves them vulnerable if the assessed owner stops paying. In addition, some case law holds that a tax sale conveys only that title of which the prior record owner was seized. Of course, the most interesting questions arise in jurisdictions where payment is a prerequisite to neither adverse possession nor a tax sale challenge.