'The Land Registration Act 2002 makes a poor attempt at reforming the law of adverse possession' - Discuss this statement.

 After the above has been substantiated, in registered land s75 (2) of the ‘1925’ Act provide that the paper title owner remains registered as proprietor of the land until the squatters’ title is actually registered. The paper title owner holds the property in trust for the squatter (s 75(1) LRA 1925). The squatter can apply to be registered as first proprietor in ‘possessory freehold title’ (which limits rights) at the Land Registry. However this can be upgraded to an absolute title once the Land Registry are satisfied that no one has a better title. Prior to registration and during the period where the squatter is acquiring the rights, the squatter has an overriding interest under ‘s70 (1)(f) LRA 1925,’ ‘Rights acquired or in the course of being acquired under the Limitation Acts’.

The position in unregistered land is more straightforward and the squatter subsequently acquires a good title against the whole world once the limitation period has passed, however this is subject to all other third party interests which affect the land. There is no Parliamentary Conveyance, but rights acquired under the ‘Limitation Act 1980’ can be assigned ‘inter vivos’ or passed under a will, and if the squatter dies intestate, then the rights can pass to the next of kin.

Therefore it is clear that the current law governing adverse possession is unjust, one may even go as far as agreeing that it amounts to, ‘legalised robbery’. This discontent was clearly illustrated by the recent decision in ‘JA Pye’, ‘where land is registered it is difficult to see any justification for a legal rule which compels such an apparently unjust result’. In this case the resulting ‘squatters’ (the Grahams) went into occupation of land owned by ‘Pye’, known to be potential valuable development land. It was agreed the occupation would be for grazing and the mowing of the grass. The occupation commenced initially under an informal licence and was then placed in writing permitting Graham to occupy the land until 31 December 1983. On expiry of the term ‘Pye’ required Graham to vacate the land, however Graham remained in occupation, continuing to farm the land. Requests by Graham to enter subject to further agreements were never offered until ‘Pye’ sought possession in 1998. Graham was able to persuade the court he was entitled to the land by way of adverse possession. The High Court overturning the earlier decision to allow adverse possession decided that, ‘it seems to me that it is a result which does not accord with justice. If the owner of land has no immediate use for it and is content to let another person trespass on the land for the time being, it is hard to see what principle of justice entitles the trespasser to acquire the land for nothing from the owner, simply because he has been permitted to remain there for 12 years. To say that, in such circumstances, the owner who sat on his rights should therefore be deprived of his land appears to be illogical and disproportionate’. Despite this the House of Lords were satisfied that Graham had established the two elements of  ‘factual possession’ and ‘intention to posses’. They subsequently upheld the appeal. However the Law lords were not ignorant of the unjust nature of the law. Lord Justice Bingham’s conclusion that Graham was now the true owner of the land was reached, ‘with no enthusiasm’. 

This discontent is not confined to British waters, Professor John Wylie noted in his casebook on Irish law that ‘this (adverse possession) has proved to be a most controversial subject on both sides of the Irish Sea…’ In addition ‘The Irish Law Reform Commission’ have sought reform, this has been initiated by the ‘Report on Title by Adverse Possession of Land’, ‘In short while the position of the squatter in Irish land law is not as unsatisfactory as that in English law, in its present form it undermines a number of titles, and reform is an urgent practical need…’

With decisions such as the above reached ‘with no enthusiasm’ and with changes already adopted and successful elsewhere, ‘It is noteworthy that in many Commonwealth states which have systems of title registration…(problems) have led to changes in the law governing acquisition of the title by adverse possession. In some states it has been abolished altogether’. The reforms that have led to the new Act have followed suit so to speak. Reform has been high on the Law Commissions agenda for many years. During which time the widespread criticism has been reiterated. ‘It is of course remarkable that the law is prepared to legitimise such ‘possession of wrong’, which, at least in some cases, is tantamount to sanctioning a theft of land’ (10.2) These reforms began with the Law Commissions’ Consultative Document, ‘Land Registration for the Twenty-First Century (1998). Succeeded by the Final Report, ‘Land Registration for the Twenty-first Century’: A conveyancing Revolution (2001). Followed by the Land Registration Bill and subsequent Act. The aims of which, are a replacement and complete overhaul of the ‘Land Registration Act 1925’. Creation of a new electronically based conveyancing system to replace the existing paper – based system. In addition new rules on adverse possession of registered have been introduced and a final aim is to make the register as conclusive as possible to facilitate investigation of title on-line. The new Act will only make changes to adverse possession in registered land, during the passage of the Bill Baroness Scotland of Asthall, the Parliamentary secretary in the Lord chancellors department suggested that the government’s intention was to strengthen the position of registered proprietors and she made no apology for doing so. She provided justifications for this. She purported that every year the land Registry receive over 20,000 applications based in part at least on adverse possession and in about 15,000 cases were successful. She went on to state that in disputes on adverse possession the squatter was subsequently successful in approximately 60% of cases. Additional support for the sole application to registered land was that in practice it is hoped that the new provisions will provide a strong incentive to register land and this is a key aim of the government. ‘Our debates have shown that we are all agreed that the future of conveyancing and land law lies with registered land. Unregistered land has diminished and will continue to do so at an accelerating rate as a result of the Bill (and subsequent Act)’

The ‘New Land Registration Act 2002’ has changed the law only in relation to registered land, despite being described as ‘radical change’, there are still a number of exceptions which perhaps suggest that the new Act is not as far reaching and radical as has been acknowledged. Both ‘schedule 6’ and ‘Part 9’ of the ‘LRA 2002’ govern adverse possession in registered land.

In summary adverse possession of registered land for 12 years will no longer operate to bar the registered owner from taking proceedings against the squatter. ‘Part 9 s96’ refers to the disapplication of periods of limitation, ‘no period of limitation under ‘s15 ‘Limitation Act 1980’ (time limits in relation to recovery of land) shall run against any person, other than a chargee, in relation to an estate in land or rentcharge the title to which is registered.’ Instead ‘Schedule 6’ provides that, ‘a person may apply to the register to be registered as the proprietor of a registered estate in land if he has been in adverse possession of the estate for the period of ten years ending on the date of the application.’ The existing rules on adverse possession will continue to determine if adverse possession has taken place. The Land Registry will subsequently give notice of the squatters’ application to the registered proprietor, any registered chargee, and in the case of a lease, the registered proprietor of any superior registered title (Schedule 6 paragraph 2). If none of the above parties object then the squatter can be registered after the expiration of two years. If there is an objection, the squatter may still be entitled to enforce adverse possession on three grounds. These are provided for in ‘Schedule 6 paragraph 5’. The first ground refers to the proprietary rights of estoppel and provides for possession if ‘it would be unconscionable because of an equity by estoppel for the registered proprietor to seek to dispossess the applicant, and the circumstances are such that the applicant ought to be registered as the proprietor’. This is likely to apply in very limited cases. The second condition applies where ‘the applicant is for some other reason entitled to be registered as the proprietor of the estate’, for example if the squatter buys the property in an informal sale and pays the agreed price, however no transfer is executed. This is likely to be rare. The final condition applies where, ‘the land to which the applicant relates is adjacent to land belonging to the applicant, the exact line of the boundary between the two has not been determined under rules under section 60’, the squatter must subsequently reasonably believe that this land in question is his own. This exception has been justified, ‘on the ground that it would be unconscionable for one owner to claim land from his neighbour where the neighbour had spent a substantial sum in the belief that he owned the land, and where no objection was made at the time the building was going on’. Therefore according to these exceptions there are a number of instances, which will allow for a claim in adverse possession to succeed perhaps indicating that the new legislation may be stifled by these provisions. If the squatter is incapable of satisfying one of the three grounds after the registered owner is aware and objects to the claim then the application will be rejected.

However once notified the paper owner has two years in which to either formalise the occupation or to evict the occupier. During this time the paper title owner must not ‘sleep on his rights’. If the registered proprietor fails to take action and the squatter continues with his occupation, after the expiration of the two – year period the squatter will be entitled to be registered.

Finally the Act provides for certain special cases of adverse possession, these are, rentcharges, trusts and crown foreshore. In the case of rentcharges it is intended that the Land registration rules will be passed at a later date that will deal with rentcharges. Neither a trustee nor a beneficiary (other than a beneficiary who is absolutely entitled) can be in adverse possession for the purposes of this Act. Finally in the case of Crown foreshore under ‘Schedule 6 para 13(1)’, the squatter must be in adverse possession of foreshore for 60 years before he/she can apply to be registered as proprietor.

We do not know for certain what effect this new legislation will have on future cases of adverse possession? The legislation will not come into force until the 13th October this year and this will be in stages. Therefore we can only look at previous case law and demonstrate how this may be altered under the new Act. Firstly there will be no automatic defeat of registered title after 12 years (or more) adverse possession, thus the registered proprietor’s position will be improved. Landowners like ‘JA Pye’ could sleep safely in their beds (away from the land in question), so long as their address was up to date with the land registry. Cases such as ‘Ellis v Lambeth BC’ and other unsuccessful County Council cases would surely be altered. Following notice (required under ‘Schedule 6 paragraph 2’) the Councils would be in the clear, assuming it objected in time once notified. This was expressly envisaged by the Law Commission, they proposed that the new legislation ‘will be particularly attractive to landowners such as local authorities which own numerous and perhaps widely scattered parcels of land for which they may have no present use, and which they cannot keep under regular scrutiny’ [10.19] In addition cases involving the Crown and Royal Dutchies will also benefit from the new regime, which will enable them to protect their foreshaw from encroachment. In more complex cases such as, ‘Central London Estates v. Kato Kagaku’, where the leaseholders title was capable of being extinguished and thus the freehold owner could not override the squatters claim. This was available due to the statutory provision of a ‘trust’. It appears that the proposed machinery would reverse the outcome. The leaseholders title would not be extinguished, and there would be no more ‘statutory trust’, so until the squatter applied to be registered, the leaseholder could still surrender the lease, the freeholders estate would fall into possession and the squatter could be removed.

Thus the Act will make a number of changes, and the legislation can be both praised and criticised. In addition to major changes to cases the Act’s strengths are that it is more in line with the idea of registration of title and thus supports the main idea behind the new legislation. Additionally the new Act makes it harder for adverse possession to succeed, results like ‘Pye’ that have been strongly criticised, would be unlikely. Furthermore the new provisions will persuade landowners to register their land and thus gradually all land will come within the scope of the new Act. The disadvantages of the new legislation mainly relate to the lack of jurisdiction over unregistered land. However as previously mentioned it is likely that all land will gradually become registered and thus all land will come within the jurisdiction of the new Act. Additionally the fact that there are a number of exceptions, allowing adverse possession to succumb even if a rejection is raised. In particular the boundary exception (Schedule 6, Para. 5(4)) has previously amounted to a large number of successful claims in adverse possession and thus this provision will allow for such claims to continue, perhaps limiting the Acts ‘scope’, and adverse possession it seems will continue to successfully rear its ugly head! Despite this it is unknown how these provisions will be construed, the Law Commission has indicated a restrictive approach. Furthermore the new Act will come into effect in stages and thus some provisions will not be applicable for some years. Additionally it has been suggested that perhaps the provision Part 9 s96, that extinguishes the period of limitation, which ultimately means that registered proprietor’s title can never be extinguished under the ‘LA 1980, s17’. Ironically this may prove to be good news for squatters. As Lord Goodhart suggested during the 2nd reading debate on the Bill in the House of Lords, ‘this change will help rather than hinder squatters because unless and until squatters in a particular building serve an application for title to that building under ‘Schedule 6’, the owner will not be under any pressure to remove them’. Giving improved rights to squatters is not only contradictory but also undesirable.

Thus despite the Act having a significant impact on the law of adverse possession in registered land the exceptions may still make it possible for squatters to acquire land in a manner unaccord with justice.

In relation to unregistered land the problems encompassing the law of adverse possession will remain and we therefore look to possible remedies, which may be sought. Providing that their options are not statute barred under the ‘LA 1980’, the paper title owner can initiate legal proceedings, but a simple assertion of rights will be insufficient. Adverse possession can amount to a criminal offence under the ‘Criminal Law Act 1977 s7 (1)’ and the ‘Criminal Justice’ and ‘Public Order Act 1994 ss73’ and 74, if a person having entered as a trespasser fails to leave on being required to. In addition the civil law provides that a paper title owner may exercise self-help at some stage before the squatter acquires possession of the property, but this must not constitute a criminal offence. In addition The County Court can also make an ‘interim possession order’ against an alleged trespasser on residential premises. Once made, the order takes effect immediately and the hearing for a final possession order is made during the next seven days. Moreover despite being shrouded with controversy the common law has suggested that the paper title owner in unregistered land may be able to extinguish a claim for adverse possession if the claim involves land which is leasehold, whereby the leaseholder can simply hand the title back to the freehold owner and thus the adverse possession is prevented. This was the case in ‘Fairweather’, here a lease had been granted for 99 years in 1894, the tenant’s rights had been barred by adverse possession, and he purported to surrender his lease to the freehold owner in 1959. The House of Lords held that the surrender was effective and thus the squatter would not be able to retain the land for a further 34 years. Furthermore in recent cases the issue of incompatibility with Article 1 of the European Convention on Human Rights has been raised. In February 2001 the Court of Appeal gave its judgment in ‘J.A. Pye v Graham’. It was contended that the deprivation of property by adverse possession without compensation was disproportionate to any legitimate public interest. This argument was rejected. This was again addressed in the case of ‘Family Housing Association v Donellan and others’, here it was held that the law of adverse possession was not incompatible with Article 1 (protection of property). However with the former case the lack of available jurisdiction was noted thus ‘J.A Pye’ is currently seeking remedy in ‘Strasbourg’. If they win their case then ultimately this could mean an end to adverse possession completely and far earlier than anticipated.

Therefore despite the obvious shortcomings in the Act particularly in relation to its absent jurisdiction in unregistered land, it is a fact that the minority of land does remain unregistered and with unregistered land having its basis on the idea of ‘possession’ it seems fair that the new Act provides for registered land only.

In conclusion the ‘LRA 2002’ ‘is undoubtedly one of the most fundamental changes to property law in the past century’ and does address ‘the lack of safeguards against oversight and inadvertence on the part of the registered proprietor’ Despite the apparent oversight, in unregistered land the Acts founding aim is to increase registration of title, thus it can also be said to provide for a resulting (and likely radical) change to ‘adverse possession’ in unregistered land. With this founding aim to increase registration, could this be the initiation of the end of ‘adverse possession’? Or is it destined to make an appearance through the ‘back door’, like the equally unjust and highly criticised doctrine of notice, after its subsequent reform.  

4100 WORDS.

REFERENCES

J. Wylie, ‘A casebook on Irish land Law’, Oxford Publishing Ltd 1984.

R. Abbey & M. Richards, ‘Blackstone’s Guide To The Land Registration Act 2002’, Oxford Press Ltd 2002.

Thomas. M, ‘Blackstone’s Statutes on Property Law 2002-2003’, Oxford Press Ltd 10th ed. 2002.

Tee. L, ‘Land Law – Issues, Debates and Policy’, Willan Publishing Ltd. 2002.

Stevens. J & Pearce. R, ‘Land Law’, Sweet and Maxwell 2nd ed. 2000.

J. Bray, ‘ The Comprehensive Guide To All The facts Land Law’, Hodder and Stoughton Publishing Ltd 2002.

I. Clarke, ‘The Land Registration Act 2002 – A Practical Guide’, Sweet and Maxwell 2002.

Howarth. W, ‘Nutshells Land Law’, Sweet and Maxwell. 5th ed. 2000.

J.A. Mackenzie & M. Phillips, ‘Textbook on Land Law’, Oxford Press Ltd. 9th ed. 2002.

J. Wylie, ‘Textbook on Irish land Law’, Oxford Publishing Ltd 1984.

Websites and Internet resources.

 (Hansard and Statutory instruments)

Journals and Articles used

The Legal Executive - journal of the institute of legal executives, ‘Adverse Possession The New Regime’ by Slessenger and Marks, April 2002.

C. Dyer, ‘Britain’s biggest ever land-grab’: Are squatters’ rights unfair to property owners?’, Guardian Newspapers Ltd, The Guardian London, July 9th 2002.

Conveyancer – L. Swerling, ‘The Land Registration Act 2002 and Adverse Possession’, 2003.

C. Harpum, ‘Swat the Squatters – Adverse Possession and the Land Registration Bill’, Daily Mail, 2 September 1998.

S. Pascoe, ‘Upholding Squatters’ Rights In Leasehold Land’ – Taken From ‘Conveyancer and Property Lawyer 1999’.

G. Williams, ‘Use it or Lose it? Adverse Possession And The Land Registration Act 2002’, Agricultural Law, EMIS Professional Publishing Ltd, 5th December 2002.

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