What real estate law states " If a person builds on or improves on a
property and the owner does not take necessary steps/measures in 5
years, then that person can take possession of the property as his
own"?

Hello and thanks for your question.

You're referring to "adverse possession," sometimes also called
"squatter's rights."

  "If you want to gain title to a realty parcel, you must occupy it by
open, notorious, hostile, continuous and exclusive (not shared with
anyone else) possession.... Each state has different adverse
possession time limits. California only requires five years. But Texas
requires 30 years. Other [US] states are in between these extremes."
Perfectly legal ways to obtain free real estate
http://www.chicagotribune.com/classified/realestate/chi-0205310190may31.story

You can read more about adverse possession at:
Free Advice
http://real-estate-law.freeadvice.com/adverse_possession.htm

Search terms:
"adverse possession" "five years"

The fine print:
Obviously, this answer is not legal advice that you can rely on, nor
does an attorney-client relationship exist between us.  Before taking
any action, you should consult a qualified attorney in your state for
proper advice

Good luck!
richard-ga

There are two other legal concepts that you should consider:

* Acquiescence. This can occur following a dispute over where the
boundary line lies (acquiescence and accord), or where there is an
agreement as to the boundary line where the parties respect that
boundary line for the statutory period. (That period can vary
significantly from state to state, as can the period for adverse
possession). If there is acquiescence to a boundary line following an
actual dispute, it is possible that the boundary line becomes legally
fixed at the point of the agreement.

* Waste. When a house or other structure is built such that it extends
onto or over a neighboring lot, a court may find that it would
constitute "waste" to correct the problem. If this happens, the person
who built the intruding structure must pay damages to the person whose
property was affected by that structure, but the structure remains in
place.