T.C.A. § 28-2-109 & 110: Will paying property taxes give me ownership to a piece of property?

T.C.A. § 28-2-109 states that:

“Any person holding any real estate or land of any kind, or any legal or equitable interest therein, who has paid, or who and those through whom such person claims have paid, the state and county taxes on the same for more than twenty (20) years continuously prior to the date when any question arises in any of the courts of this state concerning the same, and who has had or who and those through whom such person claims have had, such person’s deed, conveyance, grant or other assurance of title recorded in the register’s office of the county in which the land lies, for such period of more than twenty (20) years, shall be presumed prima facie to be the legal owner of such land.”

According to  T.C.A. § 28-2-109, a party that has continuously paid the state and county taxes on a property for more than twenty (20) years, and has had “assurance of title” for more than twenty (20) years, will create a “rebuttable presumption” that he or she is the title owner of the property in question.

T.C.A. § 28-2-110 provides that landowners failing to pay property taxes on a property for twenty (20) years lose the right to bring an action to assert their ownership to the property. The relevant text of this section states that:

“Any person having any claim to real estate or land of any kind, or to any legal or equitable interest therein, the same having been subject to assessment for state and county taxes, who and those through whom such person claims have failed to have the same assessed and to pay any state and county taxes thereon for a period of more than twenty (20) years, shall be forever barred from bringing any action in law or in equity to recover the same, or to recover any rents or profits therefrom in any of the courts of this state.”

These two sections work together to establish that taxpaying parties satisfying the requirements of T.C.A. § 28-2-109 are presumed to be owners of the land and that the parties failing to pay property taxes cannot file a lawsuit to assert claims against the property.

However, it should be noted that parties failing to pay property taxes for a period of twenty (20) years or more still retain their ownership interest in the property. A non-taxpaying party’s failure to pay taxes does not automatically cause that party to be ejected from the property or lose their interest in the property. Non-taxpaying parties cannot file a lawsuit to claim title to a property, but they may defend their interest in any lawsuit brought by another party. In order to obtain clear title to property, the taxpaying party would likely need to file a lawsuit to quiet title. In  cases where there is a non-taxpaying party who has an ownership interest in the property as a tenant in common with the taxpaying party, Tennessee courts will require that the taxpaying party claiming title to show that they have “ousted” their co-tenants.

What is “rebuttable presumption” of title?

In this type of matter, a “rebuttable presumption” essentially means that courts will presume that the taxpaying party is the owner of the property unless a non-taxpaying party can show that the taxpaying party has not satisfied the requirements of T.C.A. § 28-2-109, i.e., that the taxpaying party has not paid the property taxes or has not had assurance of title for a period of at least twenty (20) years.

What is “assurance of title”?

Assurance of title has been described by Tennessee courts as:

“something in writing which at face value, professes to pass title but which does not do it, either for want of title in the person making it or from the defective mode of the conveyance that is used.”

Generally, assurance of title is found when a person conveys property without the right to do so, or a document defectively grants title to a piece of land. In other words, these defects may arise when the seller of the property does not own the property being sold or the deed conveying the property contains an incorrect legal description.

What is “ouster”?

The common legal definition of “ouster” is “the wrongful dispossession or exclusion by one tenant in common of his cotenant or cotenants from the common property of which they are entitled to possession.” Ouster can occur in a variety of situations, such as when a party physically removes a cotenant from the property or performs some act that makes it clear to his cotenant that they are being excluded from ownership.

Presumptive ownership and clouds on title

While taxpaying parties meeting the requirements of T.C.A. § 28-2-109 are presumed to be the owners of the property in question, they do not have clear title to that property. As mentioned previously, a non-taxpaying owner’s failure to pay property taxes for twenty (20) years does not automatically cause him to be ejected from the property or lose his ownership interest in the property. A “presumption” of ownership is not clear and outright ownership or title. Parties possessing an interest in the disputed lands retain the right to defend their interests in the property pursuant to T.C.A. § 28-2-110.

The topic of clear title becomes especially relevant when the taxpaying party seeks to sell or mortgage the property in question. From the perspective of a potential buyer, lender, or title company, the other parties’ interests and rights would be “clouds” on the taxpaying party’s title to the property. Buyers are reluctant to buy, lenders are reluctant to make loans, and title companies may not insure a property upon which there is disputed ownership.

In summary, the payment of property taxes can create a presumption of ownership of a property. However, presumptive ownership of a property is not a “clean” title. To sell, mortgage, or insure a property, the taxpayer would likely need to file a lawsuit to quiet title to remove the “cloud” created by the other parties’ ownership interests.