Laws vary by state, but indeed if you allow someone to control your land for a set number of years without you taking a hand or interest or having rental paperwork involved, they can claim the land as theirs. Your lawyer is correct.
Get neighbor to sign off on it as a rental, or stop him from tresspassing on your property. Sounds like he will not like either one, but as your lawyer can explain better to you as per your state laws, you gotta do one or the other if you want to retain ownership of your property.
Wording & time of the verbal (???) agreement between neighbor & your wife will likely come up in all of this, can depend what exactly she said/ gave away, and who is believed in front of a judge if it comes to that. Your wife might just have to re-emburse him for the cost of seeding it, etc. if she changes her deal with him now - that is very, very grey area, but might be the best solution to get this over & ended. I think she might have offered a little too much there without realizing what she was setting up/ giving up, and will now have to meet 1/2 way on this? She'll have to chaulk it up as not knowing what she was giving away there without a signed document. Just my simple dirt farmer opinion, your lawyer will know better.
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