Squatter’s rights? A guide to Adverse Possession

Adverse possession occurs when an individual or a business is occupying property or land and operating as if the owner (despite not owning it on paper) and can end up becoming entitled to proper legal ownership.

It can be unintentional, perhaps a small piece of land is part of one site on paper but is physically part of a neighbouring site (e.g. it lies on the “wrong” side of the fence.)

Most adverse possession cases are far removed from the public perception of a “squatter” as an opportunistic activist. It is an issue that can arise when carrying out property due diligence, particularly in real estate sales and purchases, and is something landowners, purchasers, lenders and tenants should be aware of.

What is adverse possession?

Adverse possession takes place if an individual or company (a “squatter”):

• exclusively occupies another person’s land;
• without any force, secrecy or permission;
• intends to act as the owner; and
• does this for a sufficient period of time.

Relevant period of occupation and justification for squatters

The sufficient period of occupation and whether a justification is needed depends on whether the squatted land is registered at the Land Registry.

• If the land being occupied is unregistered, 12 years is typically sufficient for the squatter to be granted proper registered ownership of that land.
• The squatter does not need a justification with unregistered land – the occupancy can have been an opportunistic land grab.

However, if the land is registered, the issue becomes more complicated.

• Unless the adverse possession has continued for several decades (usually including at least 12 years prior to October 2003), the squatter has to have occupied the land for at least 10 years and must fall within a justifying ground.
• By far the most common justifying ground is that the occupied registered land adjoins a site which is properly owned by the squatter and the squatter reasonably thought that they owned the land.

Example adverse possession scenarios

Here are three scenarios where hypothetically you might need to claim adverse possession or “squatter rights”.

Scenario 1
A search of the Land Registry’s title map shows that some land at the edge of or in the middle of your property is not registered at the Land Registry. You can’t find any historical title document showing that you would legally own it.

• An owner/purchaser/funder might have a concern about the lack of documented/registered title.
• As the relevant land is unregistered, evidence of at least 12 years of adverse possession by the owner (or its tenants) can help provide comfort.
• This evidence could be the basis for obtaining indemnity insurance or even obtaining a registered title at the Land Registry.

Scenario 2
A parking space looks as though it has been fenced in as part of your property for years. However, on paper it falls within a neighbouring owner’s registered title.

• There is a potential concern here for any owner/purchaser/funder that the neighbouring owners might claim that they own and should have exclusive use of the parking space, even though it looks like and has been treated as part of your property on the ground.
• As the parking space sits on registered land, squatting for at least 10 years (sometimes more) of adverse possession is required combined with the reasonable belief that it was owned by you (the squatter) during that period.
• If that can be demonstrated, then you can try applying to the Land Registry to be registered as the official owner of the space. However, making an application to the Land Registry will result in the official/neighbouring owner being notified, and thus be alerted to an issue they were potentially unaware of, and make indemnity insurance unobtainable.
• Alternatively, squatters in this situation may prefer to obtain title indemnity insurance instead of trying a Land Registry application. However, that option has recently been called into question following a legal case which indicates (although this point of view has been criticised) that a squatter in this situation has to make a prompt application to the Land Registry after finding out about a discrepancy, otherwise the squatter’s rights could fall away.

Scenario 3
There is a section of scrub land next to your property which no one seems interested in. You are interested in tidying up the land and perhaps even building on it.

• Fencing or walling it off so that the land becomes annexed to your property should start the adverse-possession clock ticking, but this action is not without its risks.
• If the squatted land is registered, then unless you reasonably believed that you actually owned it, you would not become entitled to ownership even after 10 or more years of exclusive occupation. Meanwhile you are expending time and money on the land.
• If the squatted land is unregistered, it does not matter if you have that belief or not (it could have been an opportunistic land grab), but you would still have to continue the exclusive-occupation and acts of ownership for at least 12 years before you could be in the clear. If you build on the land today, the documented owner could come and take over the site at any time in the next 12 years.

Adverse possession: other points to consider

 There are further potential issues to consider with adverse possession, such as:

• Title burdens affecting the squatted land

If you become the owner of a third party’s land through adverse possession, you might be bound by all the burdens affecting it, such as mortgage payments, rights of way and restrictions on use.

• Transferring seller’s squatter rights to a purchaser

If you are purchasing a site where the seller doesn’t have documented ownership of part of the site and just has squatter’s rights, your solicitors must ensure you address in the conveyancing documentation that you get whatever rights the seller has (i.e. so the adverse-possession clock does not go back to zero).

• Roads and paths

Usually, adverse possession of a public highway is impossible (as well as illegal), so should be avoided.

If you already have a private right of way over a piece of land, it is far harder to obtain ownership of it through adverse possession. This is because the activities to demonstrate acting like an owner have to go well beyond what might just be part of using the right of way.

If you have basement vaults which jut out from your building under the pavement outside but aren’t in your registered ownership, it is likely you are not a squatter but actually the full owner of the vaults. Different Land Registry procedures usually apply in terms of getting registered ownership.

• Residential buildings

Squatting in residential buildings is also potentially a criminal offence. Unlike with highways, case law indicates that obtaining ownership of a residential building based on adverse possession is still potentially possible. However, it might be a far more difficult claim than if it were a commercial building.

• Tenants staying beyond the end of a lease

If you are a landlord and your tenant stays beyond the end of the lease, the tenant could then be a squatter and eventually claim your freehold/leasehold ownership. It is therefore advisable to put in a place a new lease as soon as the existing lease expires.

• Could part of a site I am purchasing or funding have been lost to a squatter?

The hypothetical scenarios above mainly come from the perspective that you / your seller / your borrower is claiming the benefit of squatter’s rights through adverse possession. However, it is important to consider the alternative – when ownership of a piece of land you buy or lend against could be lost to a squatter.

It is crucial to appoint a surveyor early on to inspect the site and check carefully that the boundary lines shown on the property title plan match the boundary features on the ground, and that there are no signs of any third-party occupiers who aren’t occupying under a live lease or licence that you know about.

The Hamlins Real Estate team offer clients the full complement of real estate services, including commercial property, finance, litigation and construction. If you would like to find out how we can help you, please get in touch.