Squatter rights: juggling with numbers

District judge Nic Madge on why numbers are so vital in squatters' rights

Everybody, whether lawyer or layperson, knows about squatters' rights.

Twelve years' adverse possession and you acquire possessory title but, if title to the land is registered, not for long.

One of the foundations of English and Welsh land law has been cast into the melting pot of statutory reform and emerged looking very different.

Part 9 of the Land Registration Act 2002, which is likely to be brought into force on 13 October 2003, contains an entirely new scheme.

Section 15(1) of the Limitation Act 1980 provides that no action shall be brought to recover any land after the expiration of the limitation period of 12 years.

'Limitation...

extinguishes the right of the true owner to recover the land, so that the squatter's possession becomes impregnable, giving him a title superior to all others.' (Buckinghamshire County Council v Moran [1990] Ch 623, 635, CA).

Time runs from the start of adverse possession.

That requires a degree of occupation or physical control, coupled with an intention to possess without the consent of the paper owner (JA Pye (Oxford) Ltd v Graham [2002] UKHL 30; [2003] 1 AC 419).

Adverse possession may cease (schedule 1 to the Limitation Act 1980) if the occupier gives a written acknowledgement of the true owner's title (sections 29 and 30); if the true owner grants a tenancy or licence to the occupier; or if the true owner physically re-enters the land.

After 12 years' adverse possession, the paper proprietor of the land holds it on trust for the squatter, who may apply to be registered as proprietor of a new estate, where the registered land is freehold, or as proprietor of the registered estate where that estate is leasehold (section 75 of the Land Registration Act 1925).

The Land Registration Act 2002, which follows recommendations in Law Commission Report 254 'Land Registration for the Twenty-First Century', provides a new scheme for adverse possession of registered land.

Adverse possession of itself, for however long, will not bar the owner's title to a registered estate in land (section 96).

However, a squatter will be entitled to apply to the Land Registry to be registered as proprietor after ten years' adverse possession (section 97 and schedule 6).

The Land Registration Rules 2003, laid before Parliament on 6 June 2003, set out the procedure to be followed.

Applications will have to be in form ADV1 and accompanied, among other things, by a statutory declaration.

The registered proprietor, any registered chargee, and certain other persons interested in the land will be notified of the application.

If the application is not opposed by any of those notified, the squatter will be registered as proprietor of the land.

Otherwise, adverse possession for ten years will not by itself give a right to registration.

If any of the people notified opposes the application it will be rejected, unless the adverse possessor comes within one or more of three conditions contained in schedule 6 paragraph 5 - either it would be unconscionable because of an equity of estoppel for the registered proprietor to seek to dispossess the applicant; or the applicant is for some reason entitled to be registered as a proprietor; or in some circumstances, the land is adjacent to land belonging to the applicant.

To come within this third category, 'for at least ten years of the period of adverse possession ending on the date of the application, the applicant (or any predecessor in title) [must] reasonably [have] believed the land to which the application relates belonged to him' (paragraph 5(4)(c)).

This third ground will not be brought into force for another year, that is until 13 October 2004.

If the squatter's application for registration is refused, but the squatter remains in adverse possession for a further two years, he will be entitled to apply once again to be registered and will this time be registered as proprietor whether or not the registered proprietor objects.

The purpose of the two- year period is to enable the paper owner to evict the squatter.

Where the registered proprietor brings proceedings to recover possession from a squatter in that intervening period, the Act will allow the squatter to establish certain limited defences which are consistent with the three conditions in schedule 6.

Ten years' adverse possession by itself is not a defence.

If a landowner obtains judgment for possession against someone who has been in adverse possession for ten years, that judgment ceases to be enforceable two years after the date of the judgment (section 98).

If, in proceedings, a court determines that a squatter has a defence under section 98 or that a judgment for possession ceases to be enforceable under section 98(4), the court must direct the Land Registrar to register that person as proprietor of the estate.

The Land Registration Act 2002 will not immediately affect the position of those who have already acquired possessory title prior to its implementation.

Schedule 12, paragraph 18 provides that where a registered estate in land is held in trust for a person by virtue of section 75(1) of the Land Registration Act 1925 immediately before the coming into force of section 97, he will be entitled to be registered as the proprietor of the estate.

Similarly, a person will have a defence to any action for the possession of land if he is entitled under schedule 12 paragraph 18 to be registered as the proprietor of an estate in the land.

For three years after 13 October 2003, the squatter's unregistered interest will be an overriding interest whether or not he is in actual occupation and so will be binding on purchasers (schedule 12, paragraph 7).

However, after three years have passed, any squatter who has not been registered as owner will only continue to have an overriding interest if he remains in occupation and schedule 3 paragraph 2 applies.

A special telephone Actionline staffed by a team at Durham Land Registry has been set up to deal with queries arising from the Land Registration Act 2002.

The enquiry line number is, tel: 0870 90 88 061.

LINKS: www.hmso.gov.uk/acts.htm Contains the Land Registration Act 2002www.landreg.gov.uk Contains the Land Registration Rules 2003;www.lawcom.gov.uk Contains the Law Commission Report 254 'Land Registration for the Twenty-First Century' District Judge Nic Madge sits at West London County Court