Squatters acquiring ownership through adverse possession

Adverse possession is the occupation of land by a person not legally entitled to it. If adverse possession continues unopposed for a period specified by law (known as the 'limitation period', see below), a squatter can gain legal ownership of land without paying any compensation.

In order to acquire title by adverse possession, a squatter must have:

• factual possession of the land (see below)

• an intention to possess the land to the exclusion of all others, including the legal owner.[1] However, a person who wrongly believes that they are a tenant could also occupy a property and acquire possession of it in the same way as a squatter without the need to show that they have an intention to exclude the legal owner[2]

• the possession must be 'adverse', ie without legal entitlement or without the owner's consent.

In order to have factual possession of the land, the squatter must be dealing with the land as an owner might be expected to, and no one else must be doing the same. There must be an appropriate degree of physical control, which is to be determined on the circumstances of each case.[3]

It is not necessary for the adverse possession to be by one person for the whole of the period: as long as the period of possession is continuous, the periods of possession of successive squatters may be aggregated.

An acknowledgment by the squatter that the owner of the legal title has a better title than the squatter will interrupt the period of adverse possession. Such an acknowledgment must consist of a statement by, or on behalf of, the squatter that is reasonably understood by the legal owner to be an acknowledgment of her/his title. A solicitor's letter that acknowledged the owner's title to the land did not interrupt the period of adverse possession where it was written on behalf of the squatter's company, rather than the squatter himself.[4] In a case where the owner of the paper title did not pursue possession proceedings within the limitation period, despite ample opportunity, the decision to grant ownership of the property by adverse possession was upheld.[5]

What if the squatter has committed a criminal offence or is occupying as a result of fraud?

The criminalisation of squatting in a residential building under section 144 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, which came into effect on 1 September 2012, does not preclude a squatter from acquiring the owner's interest in property by adverse possession.[6] The criminalisation of squatting did not mean that granting title to a residential property based on adverse possession to a squatter in such circumstances amounted to him benefiting from his criminal conduct.

Where a person enters into possession of land through a fraudulent transaction (or where there is a mistake, or the owner's rights are deliberately concealed), this is also no bar to acquiring title through adverse possession. However, the limitation period in these cases runs from the time that the fraud is discovered.[7] In one case concerning adverse possession of registered land prior to 13 October 2003, an owner was - without his knowledge - fraudulently deprived of his property. The fraudster was registered as proprietor. He then gifted to the property to his son who became the new registered proprietor. The son was also aware of the fraud. The court held that, after the specified time period had passed from when the owner discovered the fraud, the son was able to acquire full legal title.[8]

Where land cannot be acquired through adverse possession

Title for land which forms part of a public highway vests in the highway authority and cannot be acquired by adverse possession.[9] Title for the riverbed over which houseboats are moored vests in the river authority and also cannot be acquired by adverse possession.[10]

Adverse possession and flats

The Privy Council held that, as a matter of principle, land can be owned in horizontal layers, as in the case of purpose-built residential flats, so that it would be possible for a person to acquire title of part of a building by adverse possession.[11]

Under section 15 of the Limitation Act 1980, a squatter could obtain title to land by taking uninterrupted and unchallenged adverse possession of it for 12 years (or such extended period as the Limitation Act requires in the case of fraud, mistake, deliberate concealment or disability[12]), provided that they were in possession of the land and had the intention of having exclusive possession of it. In legal terms, the original owner is treated as having held the land on trust for the period of adverse possession, and when the required period is completed, the trust is replaced by the right to be registered as the owner.

The provisions of the Land Registration Act 2002 which came into force on 13 October 2003 do not affect the rights of squatters on unregistered land. See Land Registry Practice Guide 5 for more information.

The Court of Appeal analysed the terms of the Limitation Act 1980 and concluded that, in relation to a mortgage, it was not necessary for the borrowers to show that their occupation was adverse (ie without the consent of the mortgagee, or as occupying the property as trespassers), rather it was sufficient that the bank had a right of action but that it did not take action to enforce this right.[13]

The Land Registration Act 2002, in force from 13 October 2003, makes it extremely difficult for squatters to claim adverse possession of registered land.[14] Even if the squatter has been in possession for more than 12 years, s/he will not have an automatic right to be registered as the land's legal owner (however, there are transitional measures for squatters who occupied registered land when the Land Registration Act 2002 came into force - see 'Transitional measures' below). It is necessary to make an application to the Land Registry for title to the land to be acquired.

Right to apply for registration

A squatter on registered land will have the right to apply for registration if:[15]

• adverse possession has been enjoyed for at least 10 years

• s/he is able to provide evidence of this (for example with utility bills), and

• the landlord does not object to the application for registration.

It is therefore up to the squatter to take the initiative to register the land in her/his name, if s/he wishes to acquire title to it, although s/he must bear in mind that the application will not automatically succeed (see Land Registry Practice Guide 4). Even after registration of title by adverse possession, where a person successfully applied to become the registered owner of land on the basis that he had acquired title through adverse possession but it subsequently transpired that he had not been in adverse possession, the registry could be corrected and put back into the condition it was prior to the application.[16]

The Land Registration Act 2002 contains transitional provisions designed to protect squatters on registered land who had already acquired established rights before the Act came into force.[17] Rights acquired under the Limitation Act 1980 will, therefore, subsist against the registered owner if the squatter can show adverse possession prior to 13 October 2003. The squatter can apply to be registered at any time. If s/he is in actual occupation, her/his interest will bind purchasers. If s/he was not in actual occupation, her/his interest could only bind purchasers if it was registered by 13 October 2006.

The squatter must make an application to the Land Registry to have the land registered in their name, instead of that of the registered owner.

Formerly, the county court would adjudicate upon whether the squatter had in fact been in adverse possession for 12 years. After the coming into force of the Land Registry Act 2002, these decisions are of exclusive jurisdiction of the Land Registry, except in certain prescribed circumstances when the county court is dealing with a squatter's defence to a possession claim (this exception does not apply when the court is dealing with other kind of claims against the squatter, for example an application for an antisocial behavior injunction).[18]

On receipt of an application, the Land Registry will serve notice on the registered owner, as well as any other interested parties such as chargees (mortgage lenders, for example) and anyone else who would be prejudiced by the adverse possession.[19]

The registered owner of the property or any other interested party can then serve a counter-notice to the Land Registry, which constitutes an objection to the squatter's application. This must be done within 65 working days.[20] However, the Court of Appeal held that a registration by a person who had not in fact been in possession of the land and had not been entitled to apply to be registered as its owner was susceptible to correction as a mistake under paragraphs 1 and 5 of Schedule 4 to the Land Registration Act 2002, even outside this time limit.[21]

Where there is no objection, the squatter's application will succeed and s/he will be registered in place of the registered owner. However, when a counter-notice is served, the squatter's application will be dismissed, unless s/he can establish that one or more of the following grounds apply:

• it would be unfair to dispossess her/him because of an 'equity by estoppel' (this occurs when the legal owner, through either words or conduct, gives the squatter reason to believe that s/he could occupy the property and would not be evicted)

• s/he has an independent right that suggests s/he ought to be registered as owner, for instance where the legal owner is holding the land on trust for the squatter, or

• there has been a reasonable mistake as to boundaries where the following four conditions are all met:[22]

  • the land concerned is adjacent to land owned by the squatter

  • the exact line of the boundary has not already been determined

  • the squatter had reasonably believed that the land belonged to her/him for the last 10 years, and

  • the land was registered, by the legal owner, for more than one year prior to the date of the application.

If the applicant can show that one of the three grounds applies, s/he may then be registered in place of the registered owner. Where a squatter has rights prior to 13 October 2003, such as 12 years' adverse possession, s/he may rely on those rights and is not limited to the above grounds.

The registered owner may bring possession proceedings to evict the squatter from the property. Where this happens, the squatter may be able to establish certain limited defences.[23] A squatter can defend an action for possession of the land if:

• the day before the action was brought, s/he was entitled to apply to be registered as the proprietor and, had s/he made such an application on that day, the third condition (reasonable mistake as to boundary) would have been satisfied[24]

• her/his application for registration was initially rejected, but s/he has remained in adverse possession for a further two years,[25] or

• s/he has some independent right to possession of the land, such as an equity arising in her/his favour by proprietary estoppel (see above).[26]

Where a court finds that the defence applies, it must order the registrar to register the squatter as the owner of the land.

Where the registered owner is successful in obtaining a court order to evict the squatter, the order must be enforced within two years of being granted, otherwise, it will become unenforceable.

If the squatter's application to the Land Registry is rejected because a counter-notice has been served, and there are no grounds on which the squatter can rely, s/he will still be able to re-apply to be registered as owner if s/he remains in adverse possession continuously for a further two years from the date of rejection.[27]

The squatter will be entitled to be registered as owner, unless one of the following applies:[28]

• there are pending possession proceedings, in which the squatter is a defendant

• a possession order has been made against her/him in the last two years, or

• the squatter has been evicted following a judgment for possession.

The squatter is then automatically registered in the place of the legal owner.[29] This means that the registered owner, or any other interested party who has been given notice of the rejected initial application by the squatter, has at least two years in which to evict the squatter, or at least to start proceedings to do so. Alternatively, the registered owner or other interested party can legitimise the squatter's occupation of the property by, for instance, granting a licence under which s/he can stay on the property.