In England and Wales, a person’s land will be either registered or unregistered land. If land is registered, it will have been the subject of an application for registration to Her Majesty’s Land Registry (LR). Most transactions now (i.e., a house purchase, a new mortgage, or a long lease) of unregistered land trigger compulsory registration and the consequences of failing to register can have repercussions, but these will not be discussed here.
This article is written assuming the land is freehold land, as different considerations apply in respect of leasehold land and these will not be covered here.
If a Squatter is in adverse possession of unregistered land and the owner fails to take court proceedings to evict the Squatter before, usually, the end of 12 years from the time when the Squatter first occupied the land, the owner’s title is extinguished (section 17 Limitation Act 1980). The Squatter acquires a new title and the right to apply to LR for voluntary first registration of it. There are different time limits if the land is owned by the Crown, a Charity, a Trust, or a person under a disability. For the purpose of this article, the assumption is that the land is owned by private individual(s) and the limitation period is 12 years.
The position is similar to that of unregistered if a Squatter is in adverse possession of land registered before the 13 October 2003 and the time limit for bringing an action for recovery of the land (i.e., 12 years) has expired before 13 October 2003.
However, because the Squatter in either case is not a purchaser for value, the land now acquired by the Squatter is subject to any subsisting burdens and rights, such as restrictive covenants, rights of way or of drainage protected by, in respect of unregistered land, the first registration and, in respect of registered land, those matters on the registered title documents or protected by the existing registration, except mortgages created after the start of the adverse possession; these interests will not bind the Squatter.
The Land Registration Act 2002 (the Act) made significant changes to adverse possession of registered land. There is still protection for a Squatter who has fully accrued rights over land registered before the 13 October 2003 and is therefore entitled to be registered as proprietor by virtue of Schedule 12, para 18 (1) of the Act (as discussed above). Now, unless a Squatter’s rights over registered land have fully accrued before 13th October 2003, they do not continue to accrue and the Squatter of registered land must look to the Act for help.
Under the Act, what amounts to ‘adverse possession’ still applies; one still has to show factual or physical possession of the land in question and the necessary intention to possess it.
Because section 17 of the Limitation Act 1980 no longer applies to registered land after 12th October 2003, only a successful application under the Act can give title to registered land. So, if a person started occupying registered land, say, on 20 January 1999, he could today only make an application under the Act because time ‘accruing’ under the Limitation Act after 12th October 2003 can no longer count in respect of registered land.
An application can be made under the Act where a Squatter relies on 10 years’ adverse possession of registered land, such period ending on the date of the application. The land does not have to have been registered land for the whole 10 year period. So, a Squatter could take adverse possession of unregistered land on the 28 June 2009, which the owner registers voluntarily on 30 September 2015, and apply on and including 27 June 2019 for change of ownership. However, the Act has made it more difficult for a person to acquire title of registered land by adverse possession.
Upon receipt of an application under the Act, LR sends a notice to the existing registered owner and other specified persons, i.e., a mortgage lender, if there is one. They can then, within a time limit, either consent to the application, object to it, or serve a counter-notice; or object and serve a counter-notice. If the registered proprietor or a specified person does nothing within the time limit, the applicant will become the registered owner, free of any mortgage affecting the registered land immediately before his own registration as proprietor.
The owner could, for example, object to the application because it is disputed that the Squatter has been in adverse possession for 10 years. If an objection is received, the objection will have to be disposed of, if it is not groundless, by agreement between the parties or the First-tier Tribunal.
If a counter-notice is served, LR will reject the application unless the applicant stipulated in the application that he would rely on one of three conditions laid out in the Act (Schedule 6, para 5 of the Act). The first condition requires the applicant to demonstrate that the owner of the land, in some way, allowed him to believe mistakenly that the land was his, and as a consequence of that belief, he spent money building on it, or altering it in some way. If it is not too unjust to the owner, the applicant will be registered; otherwise, an alternative remedy would have to be given.
Secondly, an applicant can succeed if he can show ‘some other reason why he should be registered as owner’. For example, the applicant may have purchased the land from his neighbour without completing the right paperwork.
Finally, if an applicant can show that there has been a ‘reasonable mistake as to the boundary’, he can succeed on this ground. The applicant has to show that the land he is claiming is adjacent to land he already owns and which for the last 10 years he (or any predecessors to him) reasonably believed belonged to him. The land being claimed must also have been registered for more than one year before the application.
If an applicant is successful as a result of satisfying one of the three conditions, the applicant is subject to any mortgage affecting the land, but he does have the right to have the mortgage apportioned between the land he has acquired and the remainder, if there is any, based on their respective values.
Is a purchaser buying land for valuable consideration affected by the rights acquired or in the process of being acquired by a Squatter…?
A person buying unregistered land (who will need to compulsorily register the land) should check it for any obvious signs of a Squatter. Firstly, for three years from 13 October 2003, a purchaser would be bound by the Squatter’s rights regardless of knowledge of them or the actual occupation of the land by the Squatter (Schedule 12, para 7 of the Act). So, once a Squatter had extinguished the owner’s title, he could go off the land, but a purchaser, who had no way of knowing that Squatter’s rights affected the land he was buying, was subject to the Squatter’s rights. Fortunately, from 13 October 2006, a purchaser of unregistered land will take the land subject to a Squatter’s rights only if he knows about them (i.e., he has been told) (Section 11 (4) (c) of the Act) or the Squatter is in actual occupation of it (Schedule 1, para 2 of the Act).
The same applies, with the exception below, to a Squatter’s rights which had fully accrued before 13 October 2003 in respect of registered land. For three years from 13 October 2003, a purchaser was bound by the Squatter’s rights regardless of knowledge of them or the actual occupation of the land by the Squatter (Schedule 12, para 11). From 13 October 2006, however, a purchaser of the land will take it subject to the Squatter’s rights if the Squatter is in actual occupation of the land except where the purchaser does not actually know about the Squatter’s occupation and the occupation is not obvious from a reasonably careful inspection of the land at the time of the purchase. Moreover, a purchaser will not be bound by a Squatter’s rights if the Squatter failed to reveal the rights to a purchaser if asked and it was reasonable for him to reveal details of the rights to the purchaser (Schedule 3, para 2 of the Act).
Under the Act a Squatter does not acquire an entitlement to be registered as the new owner of registered land. A Squatter can only be registered as the owner because either no objection has been lodged, or an objection has been disposed of in the applicant’s favour; or one of the three conditions has been satisfied.
Action….Whilst it is now more difficult to become the owner of registered land by adverse possession after 2003, it is crucial that the address for the registered owner on the register is kept up to date, so that if a notice of an application by a Squatter is sent by Land Registry, it will reach the owner, so action can be immediately taken to prevent the Squatter being registered as the new owner.
Also, one should consider registering voluntarily unregistered land, as this will have the effect of stopping time accruing in favour of a Squatter and the owner losing land to the Squatter.
Francis Whitehead, Solicitor.
Hopleys GMA, incorp. Keene & Kelly, a QualitySolicitors Firm
39 King Street
Dated 28 July 2019.
This blog/article is for general information only and your own private use and not to provide specific legal advice to you or anyone. There is no guarantee that the information in this blog/article is correct, current or up to date. By using this blog you understand that there is no legal contract of solicitor/lawyer/client relationship between you, the writer or firm. The blog/article should not be used as a substitute for obtaining legal advice.