The term 'squatters' rights' is a slang phrase that means to obtain ownership by the right of possession. The legal term for squatter's rights in North Carolina and other states is ‘adverse possession’. Each state has specific time limits and rules relating to adverse possession of real property. North Carolina squatters' rights are based on claim of title and on color of title. Adverse possession is defined as a way of obtaining a legal title to real property by the continuous possession of the property without the interference or permission of the property's owner of record. Claimants must meet several criteria and possession must be hostile or open and notorious, meaning that the person claiming adverse possession must visibly occupy the property. In North Carolina, tax payments and property improvements are not a requirement for adverse possession as they are in other states. North Carolina laws require a prescriptive period of 20 years of continuous possession before a person can file for title based on adverse possession. 'Color of title' is a legal real estate term that means the person claiming ownership of real property has incorrect documentation for ownership or the transfer of ownership is not properly registered. Color of title is one way that people can lay claim to a full parcel of property, not just the occupied portion. In North Carolina, a person may obtain the title to real property by adverse possession and color of title after seven years of continuous possession, whereby the owner of record may have specific reasons for challenging the claim, as well as a set time period for the challenge. Disabilities such as mental incompetence, age and imprisonment are viable defenses against adverse possession. In North Carolina, the actual owner of record has three years to challenge the squatter's rights' claim, after the disability has been lifted.