Acquisition of an estate by adverse possession

Adverse possession of unregistered land

Here we will look at the position of a squatter in adverse possession of unregistered land who has completed the limitation period.

In the case of unregistered land the adverse possessor is regarded as having an estate in fee simple from the moment when he first takes possession (Leach v Jay (1878) 9 ChD 42 at p.45) although until the limitation period has been completed, his title is always liable to be defeated by the owner. Thus even before the period is completed, the squatter has the right and powers of an owner, against everyone except the person he has disposed. This means that he can sue for torts against the land (such as trespass and nuisance), and can recover the land if he himself is disposed by a third party.

Completing the limitation period

When a squatter has completed the limitation period the disposed owner’s right to recover the land is barred and his title to the estate is extinguished (Limitation Act 1980, s. 17). In other words, there is no longer anyone with a better title to the land. The estate held by the squatter is regarded as a fee simple, irrespective of whether his adverse possession has been against the fee simple owner or only against a tenant.

Third party rights over the land

The squatter takes the land subject to all the rights which affect it, such as for example, easements or restrictive covenants benefiting neighbouring landowners. His title to the land is acquired by operation of law, not by any transfer or conveyance to him. Consequently, he is not a ‘purchaser’ in the technical sense and so cannot take advantage of the rules which invalidate certain third party rights against purchasers. As a result, he is bound by such rights despite the fact that he has no notice of them or that they have not been protected by registration on the Land Charges Register.

Completing the limitation period against a tenant

Completion of the limitation period against a tenant will bar that tenant’s right to recover the land and extinguishes his title against the squatter. Despite the fact that the disposed owner held only a leasehold estate, the squatter is regarded as holding a freehold estate. He does not take over the leasehold estate which was held by the tenant, and so does not enter into any relationship with the landlord or become liable as a tenant on the covenants in the lease.

Although completing the limitation period bars the tenant’s rights against the squatter, it does not affect the position of his landlord. The landlord has no right to physical possession of the land until the lease comes to an end. Thus the squatter may complete the limitation period against the tenant and be able to stay on the land for the duration of the lease, but once it comes to an end, the landlord will be able to recover possession from him. It is only if the squatter remains on the land for a further limitation period after the lease has ended that he will be able to bar the landlord’s rights and extinguish his estate.

There are a number of factors to be taken into account when deciding whether a claim to recover unregistered land is time-barred. These include: the need for possession to be adverse; the possibility that the person who has been dispossessed is a tenant or is under a disability; and the chance that there are persons entitled to future interests in the land. It should not, therefore, be too readily assumed that occupation of another’s land for a simple period of 12 years will necessarily allow one to obtain good title as against any prior owners.

Adverse possession of registered land under LRA 1925

In this section, we will look at the position of a squatter in adverse possession of registered land who completed the limitation period before LRA 2002 came into force on 13 October 2003.

Under the old law relating to registered land time ran against the registered proprietor in exactly the same ways as it did against the owner of unregistered land, and his right of action against the dispossessor was barred under the Limitation Act 1980 s. 15 at the end of 12 years. However, some variation of the existing rules was needed at the end of the limitation period, to take account of the fact that the registered proprietor remained owner of the estate until someone else was registered in his place. Accordingly, LRA 1925 s. 75(1) provided that the proprietor’s title was not extinguished at the end of the limitation period. The transitional arrangements in LRA 2002 provide that where the completion of the limitation period had given rise to a trust before the Act came into force, the squatter is entitled to be registered as proprietor of the estate (Sch 12, para. 18(1)). The dispossessed owner may not discover the presence of the squatter until well after the completion of the limitation period, and so it seems that claims under the old rules may still arise for some time to come.