Adverse possession

This legislation received Royal Assent on the 26th of February 2002.[12] The rules for unregistered land remained as before. But under the LRA 2002 Schedule 6, paragraphs 1 to 5, after 10 years the adverse possessor is entitled to apply to the registrar to become the new registered owner. The registrar then contacts the registered title holder and notifies him of the application. If no proceedings are launched for two years to eject the adverse possessor, only then would the registrar transfer title. Prior to the 2002 Act, a land owner could simply lose title without being aware of it or notified. This was the rule because it indicated the owner had never paid sufficient attention to how the land was in fact being used, and therefore the former owner did not deserve to keep it. Before 2002, time was seen to cure everything. The rule's function was to ensure land was used efficiently.[13]

Before the considerable hurdle of giving a registered owner notice was introduced in the LRA 2002, the particular requirements of adverse possession were reasonably straight forward.

First, under Schedule 1, paragraphs 1 and 8 of the Limitation Act 1980, the time when adverse possession began was when "possession" was taken. This had to be more than something temporary or transitory, such as simply storing goods on a land for a brief period.[14] But "possession" did not require actual occupation. So in Powell v McFarlane,[15] it was held to be "possession" when Mr Powell, from age 14, let his cows roam into Mr McFarlane's land. The intruder must also show that they were dealing with the land as an occupying owner might have done, and that no one else had done so.

The second requirement, however, was that there needed to be an intention to possess the land. Mr Powell lost his claim because simply letting his cows roam was an equivocal act: it was only later that there was evidence he intended to take possession, for instance by erecting signs on the land and parking a lorry. But this had not happened long enough for the 12-year time limit on McFarlane's claim to have expired. As a result, proving intention to possess is likely to rely heavily on the factual matrix of the case and the squatters' factual possession. In Clowes Developments (UK) Ltd v Wales and Others [2005] EWHC (Ch), the squatter cannot be found to have an intention to possess if they mistakenly believe that they are on the property with the permission of the title owner.

Third, possession is not considered "adverse" if the person is there with the owner's consent. For example, in BP Properties Ltd v Buckler,[16] Dillon LJ held that Mrs Buckler could not claim adverse possession over land owned by BP because BP had told her she could stay rent free for life.[17] Fourth, under the Limitation Act 1980 sections 29 and 30, the adverse possessor must not have acknowledged the title of the owner in any express way, or the clock starts running again. However, the courts have interpreted this requirement flexibly.

In JA Pye (Oxford) Ltd v Graham, 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 it was a breach of his right to "peaceful enjoyment of possessions" under ECHR Protocol 1, article 1.[18] The Court rejected this, holding that it was within a member state's margin of appreciation to determine the relevant property rules.[19] Ofulue v Bossert[20] confirmed this. 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.[21]

For registered land, adverse possession claims completed before 13 October 2003 (the date the 2002 Act came into force)[22] are governed by section 75(1) and 75(2) of the Land Registration Act of 1925. The limitation period remains the same (12 years) but instead of the original owner's title to the land being extinguished, the original owner holds the land on trust for the adverse possessor.[23] The adverse possessor can then apply to be the new registered proprietor of the land.[24]

For registered land, adverse possession claims completed after 13 October 2003 follow a different procedure. Where land is registered, the adverse possessor may henceforth apply to be registered as owner after 10 years[25] of adverse possession and the Land Registry must give notice to the true owner of this application.[26] This gives the landowner a statutory period of time [65 business days] to object to the adverse possession, object to the application on the ground that there has not actually been the necessary 10 years' adverse possession, and/or to serve a "counter-notice". If a counter-notice is served, then the application fails unless

• it would be unconscionable because of an equity by estoppel for the registered proprietor to seek to dispossess the squatter and the squatter ought in the circumstances to be registered as proprietor, or
• the squatter is for some other reason entitled to be registered as proprietor, or
• the squatter has been in adverse possession of land adjacent to their own under the mistaken but reasonable belief that they are the owner of it, the exact line of the boundary with this adjacent land has not been determined and the estate to which the application relates was registered more than a year prior to the date of the application.

Otherwise, the squatter becomes the registered proprietor according to the land registry. If the true owner is unable to evict the squatter in the two years following the first [unsuccessful] application, the squatter can apply again after this period and be successful despite the opposition of the owner. The process effectively prevents the removal of a landowner's right to property without their knowledge, while ensuring squatters have a fair way of exercising their rights.

Where a tenant adversely possesses land, there is a presumption that they are doing so in a way that will benefit the landlord at the end of their term. If the land does not belong to their landlord, the land will become part of both the tenancy and the reversion. If the land does belong to their landlord, it would seem that it will be gained by the tenant but only for the period of their term.[27]

Since September 2012, squatting in a residential building is a criminal offence, but this does not prevent title being claimed by reason of adverse possession even if the claimant is committing a criminal offence.[28][29] This was confirmed in Best v Chief Land Registrar,[30] where it was held that criminal and land law should be kept separate.

The party seeking title by adverse possession may be called the disseisor, meaning one who dispossesses the true owner of the property.[31] Although the elements of an adverse possession claim may be different in a number of states, adverse possession requires at a minimum five basic conditions being met to perfect the title of the disseisor. These are that the disseisor must openly occupy the property exclusively, in a manner that is open and notorious, continuously, and use it as if it were their own in a manner expected for the type of property.[32] Some states impose additional requirements. Many of the states have enacted statutes regulating the rules of adverse possession.[33] Some states require a hostility requirement to secure adverse possession. While most states take an objective approach to the hostility requirement, some states require a showing of good faith. Good faith means that claimants must demonstrate that they had some basis to believe that they actually owned the property at issue. Four states east of the Mississippi that require good faith in some form are Georgia, Illinois, New York, and Wisconsin.[33]

In addition to the basic elements of an adverse possession case, state law may require one or more additional elements to be proved by a person claiming adverse possession. Depending upon the state, additional requirements may include:

• Color of title, claim of title, or claim of right. Color of title and claim of title involve a legal document that appears (incorrectly) to give the disseisor title.[34] In some jurisdictions the mere intent to take the land as one's own may constitute "claim of right", with no documentation required. Other cases have determined that a claim of right exists if the person believes they have rightful claim to the property, even if that belief is mistaken.[35] A negative example would be a timber thief who sneaks onto a property, cuts timber not visible from the road, and hauls the logs away at night. Their actions, though they demonstrate actual possession, also demonstrate knowledge of guilt, as opposed to claim of right.
• Good faith (in a minority of states) or bad faith (sometimes called the "Maine Doctrine" although it is now abolished in Maine)[36]
• Improvement, cultivation, or enclosure[34][37]
• Payment of property taxes. This may be required by statute, such as in California,[38] or just a contributing element to a court's determination of possession. Both payment by the disseisor and by the true owner are relevant.
• Dispossession of land owned by a governmental entity: Generally, a disseisor cannot dispossess land legally owned by a government entity even if all other elements of adverse possession are met. One exception is when the government entity is acting like a business rather than a government entity.[31]

A metal plaque on the sidewalk of New York City declares that the crossing onto the private property is a revocable license (an agreement to use the property, not an invasion) to protect it from becoming a subject of an adverse possession.[39] Some New York property owners go even further by actually closing their property to the public for one day each year in order to prove their exclusive control.[40]

A disseisor will be committing a civil trespass on the property he has taken and the owner of the property could cause him to be evicted by an action in trespass ("ejectment") or by bringing an action for possession. All common law jurisdictions require that an ejectment action be brought within a specified time, after which the true owner is assumed to have acquiesced. The effect of a failure by the true landowner to evict the adverse possessor depends on the jurisdiction, but will eventually result in title by adverse possession.

In 2008, due to the volume of adverse possession and boundary dispute cases throughout New York City, the New York State Legislature amended and limited the ability of land to be acquired by adverse possession.[41] Prior to the 2008 amendment, to acquire property by adverse possession, all that was required was a showing that the possession constituted an actual invasion of or infringement upon the owner's rights.[42] Approximately eight years after the 2008 amendment, on 30 June 2016, the New York State Appellate Division, First Department (i.e., the appellate court covering the territory of Manhattan) determined the legal questions concerning the scope of rights acquired by adverse possession and how the First Department would treat claims of adverse possession where title had vested prior to 2008.[43] The Court specifically held that title to the adversely possessed property vested when the plaintiff "[S]atisfie[d] the requirement of the statute in effect at the relevant time."[43] In other words, if title had vested at some time "after" the 2008 amendment, a plaintiff would have to satisfy the adverse possession standards amended by the New York State Legislature in 2008; however, if title vested at some time "before" the 2008 amendment, a plaintiff would have lawfully acquired title to the disputed area by satisfying the pre-amendment standard for adverse possession. Hudson Square Hotel also resolved two often highly litigated issues in adverse possession cases where the air rights are more valuable than the underlying land itself: (a) "where" (i.e., in three-dimensional physical space) is an encroachment required in order for such encroachment to have any relevant operative effect or consequences under the law of adverse possession, and (b) "what" property rights are acquired as a result of title to the ground floor area (i.e., the land) vesting with the plaintiff. In Hudson Square Hotel the defendant argued that the plaintiff had only acquired title to the underlying land, but not the air rights, because the plaintiff never encroached above the two-story building. This argument was motivated, in part, by the fact that the zoning laws at the time permitted the owner of the land to build (i.e., develop) up to six times the square footage of the ground floor area. For example, if the disputed area was 1,000 square feet, there would be 6,000 square feet of buildable square footage to potentially be won or lost by adverse possession. The Court clarified, "It is the encroachment on the land ... that allows title to pass to the adverse possessor."[43] In other words, the plaintiff did not need to encroach upon all six stories in order to adversely possess the air rights above the land. The Court also held, "With title to land come air rights."[43] In other words, by acquiring title to the land (i.e., ground floor area), the plaintiff also acquired ownership of the more valuable air rights that were derivative of title to the underlying land.

In other jurisdictions, the disseisor acquires merely an equitable title; the landowner is considered to be a trustee of the property for the disseisor.

Adverse possession extends only to the property actually possessed. If the original owner had a title to a greater area (or volume) of property, the disseisor does not obtain all of it. The exception to this is when the disseisor enters the land under a color of title to an entire parcel, their continuous and actual possession of a small part of that parcel will perfect their title to the entire parcel defined in their color of title. Thus a disseisor need not build a dwelling on, or farm on, every portion of a large tract in order to prove possession, as long as their title does correctly describe the entire parcel.

In some jurisdictions, a person who has successfully obtained title to property by adverse possession may (optionally) bring an action in land court to "quiet title" of record in their name on some or all of the former owner's property. Such action will make it simpler to convey the interest to others in a definitive manner, and also serves as notice that there is a new owner of record, which may be a prerequisite to benefits such as equity loans or judicial standing as an abutter. Even if such action is not taken, the title is legally considered to belong to the new titleholder, with most of the benefits and duties, including paying property taxes to avoid losing title to the tax collector. The effects of having a stranger to the title paying taxes on property may vary from one jurisdiction to another. (Many jurisdictions have accepted tax payment for the same parcel from two different parties without raising an objection or notifying either party that the other had also paid.)

Adverse possession does not typically work against property owned by the public.

The process of adverse possession would require a thorough analysis if private property is taken by eminent domain, after which control is given to a private corporation (such as a railroad), and then abandoned.

Where land is registered under a Torrens title registration system or similar, special rules apply. It may be that the land cannot be affected by adverse possession (as was the case in England and Wales from 1875 to 1926, and as is still the case in the state of Minnesota[44]) or that special rules apply.

Adverse possession may also apply to territorial rights. In the United States, Georgia lost an island in the Savannah River to South Carolina in 1990, when South Carolina had used fill from dredging to attach the island to its own shore. Since Georgia knew of this yet did nothing about it, the U.S. Supreme Court (which has original jurisdiction in such matters) granted this land to South Carolina, although the Treaty of Beaufort (1787) explicitly specified that the river's islands belonged to Georgia.[45]

Some non-common law jurisdictions have laws similar to adverse possession. For example, Louisiana has a legal doctrine called acquisitive prescription, which is derived from French law.

"Squatting" became a criminal offense in England/Wales under Section 144 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO).[49]

Section 17 of the Limitation Act 1980 means the old title holder's estate will be extinguished and a new one will be created for the successful squatter.[50] This section also inserted an immediate power of entry to the premises into Section 17 of the Police and Criminal Evidence Act 1984.

Finally, schedule 6 (para 7) of the Land Registration Act 2002 allows the successful adverse possessor to be registered as the new proprietor. [51]

Scholars have identified four utilitarian policies which justify adverse possession. The first is that it exists to cure potential or actual defects in real estate titles by putting a statute of limitations on possible litigation over ownership and possession. Because of the doctrine of adverse possession, a landowner can be secure in title to their land. Otherwise, long-lost heirs of any former owner, possessor or lien holder of centuries past could come forward with a legal claim on the property. The second theory is that adverse possession is "a useful method for curing minor title defects".[52] For example, someone may have had the intention to sell all of a parcel of land but mistakenly excluded a portion of it on the title. Thus, adverse possession allows the purchaser of the land to maintain ownership of the parcel which they believed was theirs from the impressions given by the seller. The third theory is that adverse possession encourages and rewards productive use of land. Essentially, "by vesting title in the industrious settler—rather than the absentee landowner—adverse possession promote[s] rapid development". The fourth and final theory is that the adverse possessor places a high personal value on the land while the real title holder has effectively abandoned it, thus on principles of personhood and efficiency it makes sense to allow the change in title.[52]

Some legal scholars have proposed the extension of the concept of adverse possession to intellectual property law, in particular to reconcile intellectual property and antitrust law[53] or to unify copyright law and property law.[54]