Adverse Possession - Making a claim PDF

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Adverse Possession...

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Adverse Possession: Launching a Claim Registered vs Unregistered Land Registered Land under the Land Registration Act 2002 Schedule 6 LRA 2002 Stage 1 - After 10 years of adverse possession, squatter makes an application to the Land Registry to be registered as the owner of the property. Restrictions Schedule 6: paras 1(3), 8(1) (2) and 12. - The registered proprietor is classified as an enemy or detained in enemy territory or was under that state of affairs in the last 12 months - The registered proprietor is suffering under some disability - The squatter is involved in proceedings which involve asserting a right to possession of the land - There was some trust related relationship. Stage 2 - Schedule 6, para 2(1): Land Registry must notify a number of persons including title owner of the claim against the land. - No duty on the Registrar to check whether notice has reached the relevant parties. - All notified persons are given 65 business days to take action in response to the notice: o Filing counter notice o Ignoring the correspondence from the Land Registry (giving permission for the adverse possessor to be registered after the 65 days) BUT -

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No response from the title owner: Baxter v Mannion o Landowner failed to serve a counter notice and the squatter was registered. Who should notice be given to? Schedule 6, para 2 o The proprietor of the estate to which the application relates o The proprietor of any registered charge on the estate (e.g. A bank who has a registered legal charge in the form of a mortgage over the land) o Where the estate is a leasehold, the proprietor of any superior registered estate, any person who is registered in accordance with the rules as a person to be notified under this section or such other persons as the rules may provide. Can anyone else receive notice? o The Registrar may give other persons notice as considered appropriate (Rule 17 of the Land Registration Rules 2003). o Notice may be given to successors in title to the registered proprietor, known or suspected from other available information or our local knowledge to have become entitled to the estate affected, such as a trustee in bankruptcy or a

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successor local authority BUT these persons have a shorter time period (15 days to reply), less options (only consent or object) and therefore cannot serve counter notice. Can the 65-day period be extended? o If the counter-notice arrives outside of the 65-day period, it cannot be extended and the squatter will be registered as the owner of the property. in Fontaine v Bortolussi o Where the counter-notice was to arrive by midday but arrived at 2:30pm the same day, the counter-notice was treated as ineffective. Incorrect completion of the application form? Hopkins v Beacon o Vos J suggested that the completion of the box [under question 12 of the ST1 form] to the invocation of paragraph 5 [which relates to the exceptions below] was not mandatory so long as the adverse possessor places some express statement on the form to that effect. Procedural defects in registration: Chief Land Registrar v Franks o Held: CofA held that the High Court had the power to order that an application to the Land Registry that was cancelled by order of the Adjudicator be retrospectively reinstated as if it had not been cancelled.

Options of the landowner: EITHER: 1) Consent - Consequently, the squatter will be registered. 2) Oppose - Landowner files counter notice: o Saying no to the registration (no he can’t have my land!) - Landowner objects as permitted in statute: o Arguing that the 10 years of adverse possession has not been established (no he hasn’t met the conditions). o Thus, you would argue one or more of the following: that there was no dispossession or discontinuance, no actual possession (whether factual or intention to possess or both), possession was with permission and therefore not adverse or the time period has not been met. Stage 3: If the title owner files counter-notice, the claim of the squatter is rejected (outright) by the Registry unless he states in his application that he is relying on one of the three exceptions (also referred to as gateways) which exist under of Schedule 6, para 5: 1) Estoppel - Para 5(2): It would be unconscionable because of estoppel to allow the registered proprietor to dispossess the applicant where some representation was made to the squatter and relied on that representation to his detriment and the circumstances are such that the applicant ought to be registered as the proprietor.

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Example: Where the squatter has built on the registered proprietor’s land in the mistaken belief that they were the owner of it and the proprietor has knowingly acquiesced in their mistake

2) Some other reason (catch-all provision) - Para 5(3) - Example: Where the squatter is entitled to the land under the will or intestacy of the deceased proprietor or where the squatter contracted to buy the land and paid the purchase price, but the legal estate was never transferred to them. 3) Reasonable mistake as to the boundary lines: Zarb v Parry - Para 5(4) - Example: Where the dicing walls or fences on an estate were erected in the wrong place. Applicable where:  The land in dispute is next to the land owned by the squatter and  The exact boundary between the two has not been determined and  The squatter (or his predecessor in title) must have reasonably believed that at least for ten years ending on the date of application that the land belonged to him and  The land in dispute must have been registered for at least one year before the date of application.

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What satisfies this test of ‘reasonable belief’? In Zarb, the fact that they were unaware of the disputes between their predecessors and the predecessors of the current owners and given that the surveyor’s report listed the strip as theirs, the Parrys could be said to have reasonable belief. Relates to that of the adverse possessor and not his agent or solicitor: IAM Group. Why does the land have to be registered for one year? This ensures that the paper owner has a chance to obtain a possession order and remove the squatter. If the squatter had possessed unregistered land for 10 years, then the land is sold and registered, he could immediately apply to be registered as the owner as he would have satisfied the 10-year requirement. This would be unfair to the new owner.

Thus, if one of the three exceptions applies, the Land Registry will register the adverse possessor as the title holder BUT If it is concluded by the Registry that none of the three apply and the application is rejected, the paper owner must take steps to evict the squatter. Stage 4: If the application is rejected (on the basis of the inapplicability of one of the three claimed exception), the title/paper owner has two years to evict the squatter. .

Stage 5: If no action is taken by the paper holder for two years, the squatter will have another opportunity to be registered: - However, he will not have to go through the process again as the title owner or other notified parties will not be given another opportunity to defend their title but rather will be sent notice pursuant to rule 17 of the Land Registration Rules 2003. - The notified parties will be given 15 business days to reply where they may be consent or object to the application. Consent to the application: - The adverse possessor is registered as the new owner of the property. Object to the application: - One of the notified parties may only object to the application to challenge the fact that the adverse possessor has remained in possession for an additional two years. - The adverse possessor cannot be registered until this application is disposed of by the Land Registrar: read section 73 of the Land Registration Act 2002 in this regard. - If the objection has some merit, the registrar pursuant to section 73(5) will give notice to the adverse possessor. - If it cannot be settled by agreement between the two parties, the registrar will refer the matter to the tribunal for resolution.

Unregistered land and Registered land where the period has been completed pre-October 13, 2003. Section 15(1) of the Limitation Act 1980: ‘No action shall be brought by any person to recover any land after the expiration of 12 years from the date on which the right of action accrued to him, or if first accrued to some person through whom he claims, to that person.’ -

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By the combination of this section and relativity of title [the law protects the relatively stronger claim in a bilateral contest], a claim to adverse possession could be founded. In unregistered land and in registered land before 2002, the paper owner must commence proceedings before the conclusion of the twelve-year period According to Limitation Act 1980, Sch I, Part II, any property rights in unregistered land will elapse after 12 years [30 years for Crown land and 60 years for foreshore land]. As it relates to the time at which title is effective, for unregistered land, the squatter’s possession immediately entitles him to a fee simple. Thus, at any one time, two fee simple titles may co-exist; however, it is the stronger title (based on possession) that will prevail. [The squatter’s in the case of adverse possession for 12 years or the land owner’s if the squatter is evicted before that period of time.] In Mount Carmel Investments v Peter Thurlow Ltd, the court accepted that the only way that the clock could stop running against the paper owner was the commencement of legal proceedings. A mere letter demanding the return of the property is insufficient.

Adverse Possession and its Developing Link to Human Rights Consider Article 1, Protocol 1 (peaceful enjoyment of property); Article 6 (right to a fair trial) and Article 8 (right to respect for private & family life) Does adverse possession (specifically LRA 1925) fall afoul of human rights provisions? Pye - Mr and Mrs Graham had been let a part of Mr Pye's land, and then the lease had expired. - Mr Pye refused to renew a lease, on the basis that this might disturb getting planning permission. - In fact the land remained unused, Mr Pye did nothing, while the Grahams continued to retain a key to the property and used it as part of their farm. - At the end of the limitation period, they claimed the land was theirs. - They had in fact offered to buy a licence from Mr Pye, but the House of Lords held that this did not amount to an acknowledgement of title that would deprive them of a claim. - Having lost in the UK courts, Mr Pye took the case to the European Court of Human Rights, arguing that his business should receive £10 million in compensation because

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it was a breach of his right under ECHR Protocol 1, article 1 to "peaceful enjoyment of possessions". The Court rejected this, holding that it was within a member state's margin of appreciation to determine the relevant property rules. Otherwise, a significant limit on the principle in the case of leases is that adverse possession actions will only succeed against the leaseholder, and not the freeholder once the lease has expired. However the main limitation remains that the 2002 legislation appears to have emasculated the principle of adverse possession, because the Registrar now effectively informs owners of the steps to be taken to prevent adverse possession.

Adverse Possession and Overriding Interests - A further issue to be considered is where a person holding a successful adverse possession claim over registered land alleges that he holds an overriding interest. - We will focus on overriding interests on the basis of a claim that the person is in actual occupation. Paragraph 2 of Schedule 3 states: Schedule 1 – Unregistered interests which override a First Registration Interests of persons in actual occupation (2) An interest belonging to a person in actual occupation, so far as relating to land of which he is in actual occupation, except for an interest under a settlement under the Settled Land Act 1925 (c. 18). Schedule 3 – Unregistered interests which override Registered Dispositions Interests of persons in actual occupation (2) An interest belonging at the time of the disposition to a person in actual occupation, so far as relating to land of which he is in actual occupation, except for— (a) an interest under a settlement under the Settled Land Act 1925 (c. 18); (b) an interest of a person of whom inquiry was made before the disposition and who failed to disclose the right when he could reasonably have been expected to do so; (c) an interest— (i) which belongs to a person whose occupation would not have been obvious on a reasonably careful inspection of the land at the time of the disposition, and (ii) of which the person to whom the disposition is made does not have actual knowledge at that time; (d) a leasehold estate in land granted to take effect in possession after the end of the period of three months beginning with the date of the grant and which has not taken effect in possession at the time of the disposition. Thus, an interest in this category will override (or take priority over) a registered disposition if: 1. The person claiming the right has a proprietary interest in the land (e.g. a fee simple at common law – this is the interest that would be held by an adverse possessor) AND 2. That person was in actual occupation of the land.

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The interest will not be overriding where when the land was purchased, the facts that the person was in actual occupation was not obvious on a reasonably careful inspection of the land and the purchaser did not know about the interest or the person in actual occupation did not disclose his interest in the land if asked and it would have been reasonable to do so.

Reform (relevant to residential buildings) - Section 144 of the Legal Aid, Sentencing and Punishment of Offenders 2012 introduced the criminal offence of squatting in residential buildings. - This has been in force from September 2012. Adverse Possession and Leased Land - In relation to adverse possession of leased land, a distinction must be made between whether the claim is by the tenant against the landlord or a third party against the tenant. Where the land is subject to a tenancy: - During the currency of the tenancy, time cannot run against the landlord as the tenant’s possession is with the permission of the landlord and it cannot be, therefore, said that the tenant’s possession is adverse: Hayward v Chaloner - Further, a tenant would be stopped from denying his landlord’s title: Shillabeer v Diebel - A tenant may only assert a right to title after the tenancy has been determined; thus, non-payment of rent alone during the currency of the tenancy is insufficient to activate the accumulation of time in favour of the tenant. What would happen if the landlord owns property adjoining to the lease premises on which the tenant squats? - Bear in mind that this piece of land is not subject to any tenancy arrangement and thus the rules above could not apply. - The principle, however, is that this encroachment is to be treated as a mere unilateral extension of the tenant’s locus of his existing tenancy: Lord Hastings v Saddler. What if the tenant encroaches on (nearby) land belonging to a third party? - It is presumed that he is acting on behalf of the landlord and thus operates as a benefit of his landlord as reversioner: Whitmore v Humphries - Thus, when the property is returned to the landlord at the end of the tenancy (reversionary interest), this right to adverse possession will also flow with the tenanted premises (though the presumption is more likely to be displaced, the more distant the stranger’s land from the tenant’s holding: Smirk v Lyndale Trespasser against the tenant? - Lord Nicholls has described this as an even more daunting challenge: Chung Ping Kwan v Lam Island Co Ltd. - Gray and Gray:

o In the case of registered leasehold and freehold titles, no period of adverse possession can itself extinguish the current estate proprietor’s title. o The accumulation of time merely opens the opportunity for the squatter to take the registered freehold and leasehold titles. o Where the titles are unregistered (i.e. the tenant nor landlord’s title is registered at the Land Registry), the achievement of an unassailable title requires the extinguishment of both the leasehold and freehold title. Adverse Possession and Land on Trust - Section 18(2) – (4) of the Limitation Act 1980 states that a trustee’s title to land is never extinguished by reason of a stranger’s adverse possession until the rights of all the trust beneficiaries have been barred....