A. It's true that "adverse possession" statutes don't represent the highest level of ethical development according to Jewish tradition. But they are still appropriate and valid in the context of secular society.
We can see the underlying ethical difference between the approaches in a basic legal distinction:
In secular law, all you need to acquire ownership by prolonged occupation and use is good faith. If for all those years you really thought that driveway was yours, the neighbor can't come after many years and say, "It's mine, give it back." The court will tell him, "What you say may be true, but it's just too late -- you should have spoken up earlier." Even if he can prove he is the owner of title, he loses ownership -- assuming he was aware of your presence.
Jewish law also gives special rights to a long-time possessor: someone who occupies land for a long time doesn't have the burden of proof. If the previous owner comes along and claims the land still belongs to him, he has to prove it. However, if this previous owner can prove the land is still his, he gets it back no matter how long he was silent.
The law of adverse possession in secular law has a certain negative message since it deprives a person of his property without his knowledge or consent. Another problem is that the law is open to abuse. Many unscrupulous people exploit the rule by grabbing land and later claiming "I thought it was mine." And it's pretty hard for the true owner to disprove this person's thoughts!
In Jewish law abuse is also possible: a person can grab the land and later claim "I bought it." But since he has to provide factual details, this claim is easier for the original owner to refute, so the potential for abuse is far less.
Despite these problems with adverse possession, Jewish law does explicitly acknowledge the legitimacy of secular laws that are intended to establish orderly markets, including the regulation of land ownership. A basic principle of Jewish law is that "dina demalchuta dina" -- the secular government has the authority, and the responsibility, to make ground rules for orderly social relations.
We find in the Talmud an example of the legitimacy of a secular law similar to adverse possession. The law in Babylonia in the Talmudic era was that if the original owner failed to pay the land tax and some other individual occupied the land and paid the tax, the possessor obtained ownership. The Talmud records that a leading scholar, Ravina, was reluctant to do business with these land grabbers, who were sometimes wealthy opportunists. The great authority Rav Ashi convinced him that the law that gave them ownership was legitimate. The sovereign has a legitimate interest in having land taxes paid, and so is permitted to make a law that encourages this.
In like fashion, modern secular governments have a legitimate interest in "unencumbered titles," meaning that when a person occupies a property for a long-time he can feel confident that his title is free and clear, and that the previous owner can't cause legal problems. So the law of adverse possession, while not an ethical ideal, does serve a legitimate legal purpose.
However, the adverse possessor should certainly not exploit this law in order to fraudulently obtain land that he knows is not his. And it is best, when practical, to aspire to the highest ethical ideal, as expressed in Jewish law, and offer at least a small amount as recompense to the previous owner.
Babylonian Talmud Bava Metzia 73b, Bava Batra 54b. Rambam Gezeila 5:15 and commentaries including Hagahot Maimoniot.
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