There are two main requirements for squatter to be fulfilled prior to claim an adverse possession, proving that he was in factual possession of the land with the necessary intention to possess. These requirements were recognised in the case of Powell v McFarlene (1977) which decided in Court of Appeal and affirmed in the case of Pye (JA) (Oxford) Ltd v Graham (2003) by the House of Lords.
Factual possession is equal as to physical possession. In the case of Treloar v Nute Sir John Pennyquick (1976), in order to claim an adverse possession, the possessor has to show that either there is a discontinuance or dispossession by the true owner of the land in dispute. This principle is later stated in the form of statute in Section 15(6) Sch.1 para.1 of the Limitation Act 1980. In Powell v McFarlane (1977), decided by Slade J, his lordship stated that cannot have the legal owner and the possessor both in possession of the land in the same time. Therefore, this will be determined by the sufficient control by each of them which depends the circumstances and nature towards the land. If the possessor did what an owner should be done in dealing the land in question, this will constitute as having factual possession. In the case of Palfrey v Wilson The Times (2007), the claimant done everything in order to maintain a wall by repairing it and others. These actions are sufficient to be considered as having possession to the wall.
Cockburn C.J in Seddon v Smith (1877) stated that, enclosure is the firmest evidence in claiming adverse possession. In Pye (JA) (Oxford) Ltd v Graham (2003) (Graham’s case), defendants used the land owned by claimants for farming. The claimants do not have any key to access to the land and they were excluded from the land by hedges. It was held by the House of Lords that the defendants showed enough physical possession towards the land. In Barrett v Tower Hamlets LBC (2005), the tenants other than occupied and doing repair towards the land, the fenced off the land to prevent trespasser. But whether fencing will determine the issue of possession will much depend to the facts of the case. In Walker v Burton (2012), there was no fencing towards the land but it was held that posting notices and granting licences to shoot is considered having factual possession.
The second main requirement is the intention to the possession of the land. Prior to Graham’s case, the intention is thought to be the intention to own the land which stated in the case of Littledale v Liverpool College (1900). But now, by referring to Graham’s case, the squatter has to prove an intention to possess not intention to own the land. Lord Browne-Wilkinson also stated in the case once the squatter proved that there is a factual possession with an intention to possess, a stranger who entered the land will be a trespasser ignoring the fact whether the squatter have any long term intention to obtain a title. In the case of Roberts v Swangrove Estates Ltd (2007), Lindsay J. stated intention of the squatter is to possess unless he is dispossessed by others or until the legal owner shows his good title and real will of the land to repossess suffices.
Graham’s case stated the intention to possess is to exclude the world at large which included the legal owner of the land provided it is a reasonably possession. This will prevent the access of the legal owner. Prior to this case, squatter cannot have the intention to possess if he aware that the legal owner intended to use the land in future for other purposes and this applied in Leigh v Jack (1876). This principle was rejected by Court of Appeal in Buckingham CC v Moran (1990) where intention to possess will not suffice if the possessor aware the future use of the land. Lord Birmingham-Wilkinson in Graham’s case stated the principle will be applied in rare circumstances: ‘But it remains a possible, if improbable, inference in some cases.’
In Lambeth LBC v Blackburn (2001), even though Blackburn knew the land was belonging to others, he would have accepted a permission for example a lease if is offered to him. In this situation, the intention to possess is still exists. A late entry to the legal owner’s title, is consistent with the possessor’s intention in the meantime. In the Graham’s case, it is clear that Graham would have accepted a grazing licence from Pye. Graham’s intention until a licence was offered and accepted is sufficient to secure title by having an adverse possession. In Mitchell v Watkinsion (2013), the possessors had no right to the land between 1974 and 1990. In 1990, the licence is granted and accepted. They possessed the land for 16 years and it is long enough for the possessors to get a title by adverse possession. Having knowledge that the land belongs to others will not prevent the existence of intention to possess, but an acceptance of the land belongs to other will prevent it. This is occurred in Smart v Lambeth LBC (2013) where the possessor failed to claim an adverse possession as his acceptance of a licence from the owner. Put it in simple words, you cannot treat the land is yours when there is a permission granted by the owner. If the possessor remained in possession of the land after the permission by the owner is expired, the possessor can claim an adverse possession if animus possession, possession with intention is proven.
There is a link between both requirements where only proving have factual possession will not defeat the owner’s title. Proving intention of possession alone will lead to the occupier has a hardship in claiming for adverse possession. Both requirements have to be proved.
Land Registration Act 1925 (LRA 1925) governed a registered title and the limitation period is 12 years which is the same as the unregistered title. The registered and unregistered title applied the same principles when deciding whether the land owner can stop the clock of limitation. A squatter who possessed the land for 12 years before 13 October 2003, which Land Registration Act 2002 (LRA 2002) came into force, is entitled to be registered as proprietor of the land. Whilst registration, the land is held on trust by the registered proprietor for the successful adverse possessor. This is stated under Section 75 of LRA 1925. The possessor able to claim an interest which overrides by actual occupation of the land under Schedule 3 Paragraph 2 of LRA 2002. This interest will bind the subsequent purchaser of the land which stated in Section 29 and 30 of LRA 2002. If the possessor not fully completed the 12 years’ adverse possession before entry into force of LRA 2002, he will be governed by LRA 2002.
Now LRA 2002 if fully in force and governs issues on adverse possession. LRA 2002 stated that a state-guaranteed title, readily provable from a tittle register, should not be lost because it is possessed by a stranger. The system of e-conveyancing was promoted and is regarded as a “conveyancing revolution”. LRA 2002 aims to bring about a conclusive register and this brought some of the debates. It addresses the phenomena of slowness in the registration process and the compromised security of registered title. A title of adverse possession does not have a friendly relationship with e-conveyancing where and should be restrained. If not, removed altogether.
There is no period of limitation against a registered title. Under LRA 2002, a registered proprietor can no way lose their title because of an adverse possession by a stranger on the land for a period of time even if factual possession and intention of possession are proven. This is stated in Section 96 of LRA 2002. However, in order to prevent any inconsistency against Human Rights Act 1998, LRA 2002 established an application procedure to the adverse possessor in order to be registered as proprietor of the title. This triggered Schedule 6 of LRA 2002. This move the burden to the adverse possessor as there is nothing much for the registered proprietor to be done in order to secure their title. But he can rely to the application system to alert himself when there is any adverse claim, which he can immediately took action to secure himself.
When a person being an adverse possessor for at least 10 years by the date of making an application, he may make application to the registrar to be registered as proprietor. This is not a period of limitation, but a due date for making application. This 10 years principle is originally from the Graham’s case and is a precondition to make an application. So if a registered proprietor loses his title under this scheme may have the register rectified in his favour and recover his title if factual basis of claim of adverse possession proves to be false. In Baxter v Mannion (2011), the registered proprietor failed to respond to the notice sent by registrar and lost his title. If the registrar thinks that the application is arguable under substantive law, a notice will be sent to the current registered proprietor and certain other persons which stated in Schedule 6, paragraph 2 of LRA 2002. On the notice, registered proprietor has a choice of three responses, but if fail to respond at all, it means that the application is successful and the adverse possessor is registered with title. The scheme assumes the registered proprietor received the notice.
The first choice of response is he consented to the application. Under this choice, the land will not be a commonplace. In Balevents Ltd v Sartori (2011), it involved a small strip of land. The second choice is object the application. If he objects the application, the application is stuck until the objection is dealt. The matter may bring to the registration division of Property Chamber of First Tier Tribunal for decision if it cannot be negotiated to reach a settlement. The reason of objection is commonly related to false factual basis of claim of adverse possession. It is a simple objection by registered proprietor which will lead to either defeat the factual claim or unable to plead benefit of ‘two-year rule’ which can be claimed by adverse possessor. It is recommended to the registered proprietors to object and serve a counter-notice which is the third choice. Counter-notice allows registered proprietors to defeat the application whether or not the factual basis of the claim is false. This choice can be serve with second choice. Counter-notice will requires registrar to deal with the application under Schedule 6, paragraph 5 of LRA 2002. This will make the adverse possessor cannot be registered as new registered proprietor unless one of the exceptional ground is successfully claimed. Assuming either none of the exception can be claimed, registered proprietor will have further two years following the application by the adverse possessor to recover the possession of land. The two-year period of grace is as of right as he is the owner irrespective how long the adverse possessor has occupied the land. If it is not recovered within two years, adverse possessor may make application again and he will be a proprietor of the title and takes the land subject to any interest related to the land which is stated in Schedule 6, paragraph 9 of LRA 2002.
Since LRA 2002 provides adequate protection towards the registered proprietors, exceptions exist to balance up the scales. If registered proprietor expelled an adverse possessor within two years of the application for registration even if the factual basis of adverse possession did exist, the adverse possessor can seek to rely on the exceptions. It is available only if the possessor able to establish adverse possession by proving satisfied substantive law. Exceptions are stated in Schedule 6, paragraph 5 of LRA 2002. Firstly, it is unconscionable for the registered proprietor to dispossess the possessor because of an estoppel and the situation is where the adverse possessor ought to be registered. Secondly, the squatter is for some other reason entitled to be registered as proprietor. Lastly, where there is a boundary dispute.
The first exception extracts the principles of proprietary estoppel and applied to the law of adverse possession. Other than showing the possessor has a factual possession and an intention of possession, he must also show that he suffered detriment as the result of reliance to the assurance. A squatter built on the land mistaken belief that he was the owner and the proprietor knew it without taking any action which is stated as an example in Law Commission Report No.271. Estoppel itself is a sword which is capable to attack proprietor’s title. There are two points to determine whether is estoppel a wide ground on the adverse possession claim. Firstly, a successful estoppel claim does not guarantee the squatter to gain a title but an adverse possession claim within Schedule 6 will do so where estoppel is merely incidental. Secondly, Schedule 6, paragraph 5(2) does not stated an adverse possessor will can successfully registered if they support their claim by estoppel. The possessor has to prove that they ought to be registered which stated in the Schedule 6, paragraph 5(2)(b). So far this exception is not immediately obvious and have to be clarified judicially. It is possible that courts might develop a de facto limitation period of 20 years adverse possession and assume an estoppel exists so that it is able to grant an application for registration even if a counter-notice is served. This is not far fetched, as the history of the LRA 1925 is scattered with imaginative interpretations of apparently clear statute in order to achieve what the court thinks is a desirable social goal.
The second exception is a ‘catch-all’ condition and its unspecific nature makes it ripe for use by adverse possessors who scare the registered proprietor will take advantage on the two-year period of grace. For example, the squatter is entitled to the land under the will and in the situation where the squatter enter to a sale purchase contract but the legal estate was never transferred to him. Under these situations, the squatter need not rely to adverse possession to get the title. Deputy Adjudicator McAllister in Crosdil v Hodder (2011) stated this should be interpreted narrowly and it does not apply in this case. With the absence of adverse possession, a squatter has to make application for rectification of the register against proprietor under Schedule 4 of LRA 2002 or such application might be refused. Where an adverse possession supports an entitlement, the squatter can avoid the restrictions on rectification by adverse possession. However, not all these “other rights” can be supported under this exception. No presumption can be made at all to foresee a decision where the adverse possessor is a beneficiary under constructive trust which can be known as “other rights”. The imposition of the trust in the first place are then used a second time to justify registration as proprietor under this exception. Maybe this is what the law intended, but the provision is opaque. Same as the first exception, this exception is not immediately obvious.
The last exception, boundary exception. It reflects the reality of neighbourhood living where there is a boundary between the houses may be uncertain and be altered from time to time without any formal transfer or registration. This exception is commonly used where this exception represents the common sense on the land ownership and title registration. Schedule 6 imposes four conditions for a successful claim. This exception leads the squatter get a title with reason that he has adversely possessed the land and there is no need to rely on any other property law doctrine. Three of the four conditions are factual and need to prove that the squatter’s land is adjacent to which the claim relates, the exact boundary has not determined and the land related to the application has been registered for more than a year. The last condition is harder to be established which whether for at least ten years of the possession, does the possessor reasonably believe that the land is belonged to him? In Zarb v Parry (2011), the Court of Appeal held that the squatters’ belief is reasonable and their claim is succeeded under boundary exception. In IAM Group v Chowdrey, it clarifies that the squatter’s belief had to be reasonable, his solicitors comment on the land is not owned by him does not have any effect on his belief. However, this exception still need to be clarified.
These three exceptions acted as a tool to ensure the adverse possessor deserves to be registered as an owner and in fact supported this by his ten years’ adverse possession. Prior to LRA 2002, a legal owner had to be attentive to his estate and failure to have control on his land leads to allowing others to acquire a title to it. After LRA 2002 came into force, a legal owner can sit back and relax wait for the registrar to inform him when there is another’s claim subject to his land he can expel at any time within the next two years. Then he can sink back into slumber.
If the adverse possessor’s claim is successful and registered as proprietor, he will take the land subject to any interests related to the estate, except any registered charge. If the registration is obtained by using one of the exception, he will take the land with any registered charge which stated in Schedule 6, paragraph 9 of LRA 2002. The difference arises as the registered chargee such as a bank or lender holds a mortgage over the land with notice and could have requested the application to be dealt with under two-year rule if it wished to preserve its security. The mortgagee will have been unable to take advantage under the two-year rule and unable to challenge the registration. Therefore, it is appropriate for the possessor take the title subject to all encumbrances, including mortgage.
The reforms also triggered squatting a residential building will be considered as a criminal offence under Section 144 of Legal Aid, Sentencing and Punishment of Offenders Act 2012. The merits of criminalised the squatting hotly contested and incur a number of legal debates. The only person who can commit this offence is a trespasser who entered in a residential building. They must know or ought to have known they are trespassers and must live or intend to live in there. The Land Registry will not allow an application to title based his possession which is a criminal offence which stated in Smith v Land Registry (2009). The House of Lords in Bakewell Management Ltd v Brandwood differentiate the distinction between the acts that always unlawful and the acts that unlawful only as the claimant did not have the right to claim for it. So, if the squatter had the right to claim for the title, there is no criminal offence of squatting committed and this does not have impact on the current law of adverse possession. It is still unclear how this offence will affect the ability of a squatter to claim a title.
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