Virginia Appellate Decisions Highlight Permission in Adverse Possession Cases

By Jeffrey R. Fox, Esq.

Rosenberg& Associates, LLC*

USFN Member (DC, MD, VA)

Both the Virginia Court of Appeals and the Supreme Court of Virginia have recently handed down decisions illustrating the role of permission in adverse possession cases. The Court of Appeals case is Veldhuis v. Abboushi, Record No. 0776-22-4, May 9, 2023; while the Supreme Court case is Horn v. Webb, 882 S.E.2d 894 (Va., September 14, 2022).

               The Veldhuis decision stems from a boundary dispute in the city of Alexandria. Claimant Abboushi had long cultivated a garden in what they believed to be part of their yard. This belief was based on the assertion of their neighbor, the predecessor in interest to Veldhuis. The Court of Appeals upheld the trial court’s decision in favor of Abboushi’s claim of adverse possession. Central to both courts’ decisions was a drainage pipe that had been placed by Veldhuis’ predecessor under a boundary wall. The wall (as well as several other improvements) had been constructed by the claimants and before placing the pipe, the predecessor had asked and received their permission. Veldhuis asserted that the pipe, inserted for mutual benefit, invalidated the claim by making Abboushi’s possession non-exclusive. The Court of Appeals held that the act of asking permission demonstrated that their possession was exclusive.

“Joe’s (the predecessor) permissive use of the disputed area does not defeat the Abboushis’ claim of exclusive possession, as it is well within the right of the possessor of land to grant or deny access to the land as he or she sees fit. The operable question here is whether Joe used the land as the rightful owner; as his use as a licensee or invitee would not affect the Abboushis’ exclusive possession.” Velduis, p.8.

               In the Horn decision, the Supreme Court looks at the duration of permission. The case involves a landlocked neighbor attempting to establish a prescriptive easement to moor a boat off of an adjoining property. The Horns, or their predecessor in title, had obtained permission to do so from a previous owner of the Webb’s property. That previous owner sold the property in 1970, and there was no evidence that any of the subsequent owners had given the same permission. Overturning the trial court’s ruling, the Supreme Court held that the permission had ended when the property was sold in 1970 and that subsequent owners would have had to each grant permission. Thus, the Horns’ use had been “hostile” since 1970 and their prescriptive easement established.

USFN Copyright @2023

June 2023 USFN e-Update

by Robert R.Michael, Esq.

BWW Law Group, LLC*

USFN Member (DC, MD, VA)

On February 4, 2022, the Virginia Bureau of Insurance (the “Bureau”) issued Administrative Letter 2022-01 (the “Letter”) outlining the practice of “split settlements” in real estate closings in Virginia. The Bureau’s Letter concludes that title settlement agents may not participate in “split settlements” without violating Virginia’s laws and regulations. As a result, sellers of REO properties will often have to engage counsel (as opposed to non-attorney settlement agents) to represent them in the sale of REO properties.

WHAT ARE “SPLIT SETTLEMENTS”

Virginia Code § 55.1-1006 authorizes a purchaser to “select the settlement agent to provide escrow, closing, or settlement services in connection with the transaction.” This becomes problematic when the purchaser selects a settlement agent who is unfamiliar to the REO seller (because most sellers of REO properties prefer to have their interests represented by a firm or settlement company which is familiar with their processes and requirements). Thus, while everyone knows that the purchaser’s chosen settlement agent is THE settlement agent for purposes of the closing and disbursements, REO sellers often engage non-attorney settlement agents to manage the closing on their behalf. This is the quintessential “split settlement,” which the Bureau’s Letter condemns.

THE BUREAU’S STATUTORY ANALYSIS

The Bureau’s conclusion rests on two major premises, neither of which are controversial. First, VA Code § 55.1-1008 squarely places the fiduciary responsibility for the “settlement services” on the settlement agent. Second, provisions of the Code (at 55.1-900, 55.1-902, 55.1-903, 55.1-1000, 55.1-1006, 55.1-1007, 55.1-1008, and 55.1-1011) all refer to a singular settlement agent. To underscore the effect of these factors, the Bureau further observes that “If multiple settlement agents were anticipated or authorized under the Code, there would be no need for the Code to designate the buyer as having the exclusive right to choose the settlement agent for the transaction and to specify that this right cannot be varied or waived.” Because the “plain language of the Code [refers to] a single – not two or more - settlement agent” the Letter concludes that the Code does not authorize “split settlements.”

SELLERS ARE ENTITLED TO REPRESENTATION – BY COUNSEL

As the Letter acknowledges, the Bureau does not exercise any oversight over practicing attorneys. As the Bureau also concedes in a list of “Frequently Asked Questions” updated and posted to the Bureau’s website on February 16, 2022, sellers (and purchasers) are entitled to retain separate counsel in conjunction with a real estate closing.

THE TAKEAWAY

For closings on sales of REO properties where the purchaser selects a settlement agent with which the seller is not familiar or comfortable, sellers should engage counsel to represent their interests in the closing, since their preferred (non-attorney) settlement agent will no longer be permitted to perform those services.

@Copyright 2022

April e-Update