Legal Question in Real Estate Law in California

This kind of situation falls under the legal label "encroachment" and the rules of law are mostly based upon court decisions (so-called "judge-made law") rather than statutes. They are rather fact-specific and it would be hard to predict exactly where a court action would shake out in the situation you describe, without knowing more of the background. In general, I think your questions anticipate that you'd have greater rights than I think likely. Among other things, there is the concept of "prescriptive easement" under which, in a minority of such cases, the encroaching owner actually acquires a legal right to occupy and use the land. In other factual situations, the landowner may have a solid case against the homeowner for trespass and/or private nuisance. The remedies available in such actions are money damages, an injunction, or both. However, a court will generally not issue an injunction against an encroacher when the hardship would be substantially greater than the hardship caused by the encroachment to the owner of the land.

Another problem one would have to deal with in bringing a legal action against the encroacher is the statute of limitations. In many cases involving encroachments, your right to sue is subject to a limitations period that begins, not when the encroachment is discovered, but rather, when it was created. Since you inherited the property some time ago, and presumably the encroachment was created before that, you very well may have a statute of limitations problem.

Still another issue here may be the local zoning ordinances and the effect that a reduction in the size of your vacant parcel might have on its future buildability. If it has been rendered economically useless by the encroachment, you have greater potential damages.

With respect to some of the specific questions you asked: (1) Whomever made the mistake (a title company???) that allowed this to happen may also be liable to you for damages resulting from their carelessness, but unless there is a strong and obvious case against a well-heeled defendant, it's perhaps not worth while to pursue this; (2) You don't now own some portion of the house; (3) Neither charging rent nor notifying their lender seems to be a viable approach; (4) You can initiate legal action, but it wouldn't be a partition lawsuit; instead, it would be a lawsuit for trespass to land and/or private nuisance; and (5) recording the survey may be worth while (ask your surveyor for his views).

Finally, as to retaining an attorney, I've painted a bleaker picture of your prospects than you likely hoped for, but the truth is that courts are not especially aggressive in giving relief to landowners who have been (innocently and mistakenly???) encroached upon, and then sat back and allowed the encroachment to exist for years and years. Nevertheless, if you feel you'd like to proceed, I can accept your case at a very reasonable hourly rate, and agree to waive most travel time and costs between my home base (rural Marin County) and Riverside. I recently handled a case in the Victorville court and also one in the Joshua Tree court in rural San Bernardino County with no travel charged to the clients.

None of the remedies that you suggest apply. Generally, you have what is known as an encroachment, which are dealt with in equity. There are a lot of issues that an attorney would have to evaluate, but at the end of the day, the court is going to want to know whether the encroachment was innocent, and what the burden is for the encroaching neighbor is to remove the encroachment in comparison to the amount of harm to you.

It sounds to me as though it would be a huge burden for the neighbor to tear down their house and rebuild it, compared to encroaching on your vacant lot.