Permissive Possession Within an Active Lease Cannot Mature into Adverse Possession – EBSCO Industries, Inc. v. Michael R. Ballard, et al.

1. Introduction

EBSCO Industries, Inc. (“EBSCO”) and Michael R. Ballard, together with two entities he controls (Ballard Contractors, Inc. and MRB Farms, LLC), became embroiled in a boundary-related ownership dispute over an approximately 5.5-acre strip of land in Tuscaloosa County, Alabama. Although EBSCO held record title and had, since 1990, leased the larger tract (including the disputed parcel) to Ballard for hunting, the Ballard parties claimed that their long-term use and improvements on the strip satisfied the elements of adverse possession. The Tuscaloosa Circuit Court accepted that theory and entered judgment quieting title in the Ballard parties.

On 6 June 2025, the Supreme Court of Alabama unanimously reversed, holding that permissive possession arising out of an active lease cannot, as a matter of law, begin the statutory clock for adverse possession, and that hostile intent can only ripen after the lease terminates. The decision powerfully reiterates and refines Alabama’s doctrine of adverse possession in the leasing context.

2. Summary of the Judgment

• Record Title: EBSCO indisputably held legal title to the parcel and had paid taxes thereon.
• Trial Court Error: Although recognizing EBSCO’s title, the trial court nevertheless found that Ballard’s timber cutting, power-line easement negotiation, and gate replacement from 1992–2012 were “hostile” enough to acquire title by prescription.
• Supreme Court Holding: Because Ballard continuously renewed and paid for the hunting lease until February 2022, his possession of the disputed parcel was permissive. Adverse possession cannot run against a landlord while a lease is in effect. Consequently, the earliest possible hostile possession date was March 2022, well short of the 20-year statutory period. The trial court’s judgment was “plainly and palpably wrong.”
• Disposition: Judgment reversed and case remanded for proceedings consistent with the opinion.

3. Analysis

3.1 Precedents Cited

The Court drew upon a constellation of decisions, each shaping the modern doctrine of adverse possession:

• Kerlin v. Tensaw Land & Timber Co., 390 So.2d 616 (Ala. 1980) – Recites the classic elements: “actual, exclusive, open, notorious, and hostile” possession under a claim of right for 20 years.
• Moss v. Woodrow Reynolds & Son Timber Co., 592 So.2d 1029 (Ala. 1992) – Reaffirms that possession begun permissively cannot ripen without a clear repudiation transmitted to the owner.
• White v. Williams, 260 Ala. 182, 69 So.2d 847 (1954) – Explains constructive notice: acts of hostility must be so notorious that notice may be presumed.
• Calhoun v. Smith, 387 So.2d 821 (Ala. 1980) & Stewart v. Childress, 269 Ala. 87, 111 So.2d 8 (1959) – Limitations start only after the owner receives (actual or presumed) notice of hostility.
• Williams v. White, 207 So.3d 59 (Ala. Civ. App. 2016) – Nearly identical fact pattern; rent payments defeated hostility.
• Buckner v. Hosch, 987 So.2d 1149 (Ala. Civ. App. 2007) & McCallister v. Jones, 432 So.2d 489 (Ala. 1983) – Clarify when a dispute is true adverse possession vs. a mere boundary line controversy.

The decision synthesizes these authorities to create a bright-line procedural safeguard: the continuation of rental payments immunizes the landlord’s title from adverse claims during the lease term.

3.2 Court’s Legal Reasoning

1. Title & Presumption: Because EBSCO’s deed and tax records stood unchallenged, the Court began with the presumption that EBSCO owned the land.
2. Permissive Use Doctrine: The Court emphasized the “heavy burden” placed on one claiming by adverse possession to transform permissive use into hostile use. Payment of rent is per se permissive.
3. Repudiation Requirement: A lessee must provide actual notice of hostility or perform unequivocal, notorious acts inconsistent with the lease. Ballard did neither: he never stopped paying rent, never informed EBSCO of an adverse claim, and even accepted “coon-hunting” exceptions in the lease.
4. Temporal Calculation: Twenty-year statutory period could not begin until March 2022, after the lease’s expiration. No hostile acts occurred post-expiration, therefore no period had even begun to run.
5. Ore Tenus Deference Not Applicable: While factual findings receive deference, misapplication of law to facts receives de novo review. The trial court applied the wrong legal lens; thus, reversal was mandatory.

3.3 Impact of the Decision

• Reinforces Landlord Protections: Landlords can lease property without fear that the tenant’s long-term activities will silently convert into ownership.
• Clarifies Repudiation Standard: Lessees must undertake an overt, unmistakable act or communication signifying hostile intent, plus relinquish lease benefits, before the clock commences.
• Due-Diligence Reminder: The concurring opinion chastises purchasers who forego professional surveys. The Court signals ongoing intolerance for “assumed boundary” litigation.
• Litigation Strategy: Practitioners defending record title will now routinely emphasize any rental or licensing agreement to halt adverse-possession claims.
• Transactional Drafting: Real-estate lawyers may include explicit clauses preserving landlord title and negating any potential “adverse possession” defenses.

4. Complex Concepts Simplified

• Adverse Possession: A method of acquiring title by openly possessing someone else’s land, without their permission, for a statutory period (20 years in Alabama).
• Permissive Possession: Occupying land with the owner’s consent (e.g., tenant under a lease). Cannot evolve into adverse possession unless consent is clearly repudiated.
• Ore Tenus Rule: Appellate courts defer to trial courts on factual findings based on live testimony, unless legal principles were incorrectly applied.
• Repudiation: Clear communication or conduct notifying the owner that the possessor now claims the land against the owner’s interest.
• Profit à Prendre vs. License vs. Lease:
  • Lease – Exclusive right of possession for a term, usually for rent.
  • Profit – Right to enter land to extract natural resources (e.g., timber).
  • License – Revocable permission to use land (e.g., hunt) without transferring possession.

5. Conclusion

The Alabama Supreme Court’s decision in EBSCO Industries, Inc. v. Ballard crystallizes a vital doctrine: where a lease exists, permissive possession prevails. Neither sporadic timber harvests, infrastructural easements, nor fence construction can disturb the landlord’s title so long as rent flows and the lease endures. The ruling fortifies landowners’ confidence, equips courts with a lucid test, and admonishes purchasers to obtain proper surveys. Future adverse-possession litigants must now confront a heightened evidentiary hurdle whenever any landlord-tenant relationship shadows the history of possession.