Charles Harpum

Falcon Chambers

“Swat the squatters. Owners to be protected from home hijackers”:

Daily Mail, 2 September 1998

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1. The Land Registration Bill and its background

Law Commission and HM Land Registry:

Consultative Document: Land Registration for the Twenty-First Century (1998) Law Com No 254 (published on 1 September 1998);

Final report: Land Registration for the Twenty-First Century: A Conveyancing Revolution (2001) Law Com No 271 (published on 10 July 2001).

The Land Registration Bill. Labour Party Manifesto commitment for 2001 General Election.

Queen’s Speech: 20 June 2001.

First Reading (HL): 21 June 2001.

Second Reading (HL): 3 July 2001.

Committee (HL): 17 and 19 July 2001.

The aims of the Bill. Replacement and complete overhaul of Land Registration Act 1925. Creation of a new electronically based conveyancing system to replace the existing paper-based system. New rules on adverse possession of registered land. The underlying theme of the Bill: Law Com No 271, para 1.5: to make the register as conclusive as possible to facilitate investigation of title on-line.

2. Adverse Possession and the Bill: General

Why is reform needed?

How prevalent is adverse possession?

What has happened in other Commonwealth countries which have title registration systems?

Why should the reforms apply only to registered land? Will this create anomalies?

The essential theme of the Bill: registration is the basis of title to registered land and should, of itself, protect the registered proprietor. This is subject certain qualifications. Adverse possession does have some limited justification even in relation to registered land, in particular the need to keep land in commerce where the registered proprietor has disappeared. Furthermore, the register may be conclusive as to the ownership of a registered estate, but it is not conclusive as to boundaries. Protection is not, therefore, unlimited.

3. The detailed scheme of the Bill

I: For reference

See Land Registration Bill (“LRB”), Part 9 (Cls 95¾97); Schedules 6 (Registration of adverse possessor) and 12, para 18 (transitional: adverse possession).

For comment: Law Com No 271, 2.69¾2.74; and Part XIV; and the Explanatory Notes appended to the draft Bill in that Report.

II: Introduction

The Bill makes provision for three situations and the principles applicable to each have to coincide¾

1. Applications by a squatter to be registered.

2. Where a registered proprietor re-enters land that is in the adverse possession of a squatter, in circumstances where that squatter could have applied to be registered.

3. Where proceedings are brought by the proprietor of a registered charge or estate to recover possession.

III: Disapplication of limitation periods

The general principle: no period of limitation under LA 1980, s 15 runs against any person, other than a chargee, in relation to an estate in land or a rentcharge the title to which is registered: Cl 95(1). Reason for the exception in relation to a chargee.

A chargee in possession will not be able to acquire title under LA 1980, s 16: Cl 95(2).

LA 1980, s 17 will not apply where s 15 or 16 is excluded: Cl 95(3).

IV: Applications by squatters to be registered: Schedule 6

How the scheme works.

1. The right to apply if he/she has been in adverse possession for 10 years immediately prior to the application to be registered (for definition of adverse possession: Sched 6, para 11). Not possible if the applicant is a defendant to possession proceedings or if judgment for possession given within previous 2 years. Sched 6, para 1. Special cases: no application possible where registered proprietor is a prisoner of war or suffering from a mental or physical disability: Sched 6, para 8.

2. Notification of the application to the registered proprietor and others: Sched 6, para 2.

3. Person notified may serve counter-notice: Sched 6, para 3. If he/she does not the applicant will be registered: Sched 6, para 4.

4. If a counter-notice is served, the squatter’s application will be dismissed: Sched 6, para 5(1). Three exceptions¾

(a) proprietary estoppel: Sched 6, para 5(2);

(b) some other reason why applicant should be registered: Sched 6, para 5(3);

5. Right for squatter to re-apply if still in adverse possession 2 years after his/her application has been dismissed: Sched 6, para 6. Not possible if he/she is a defendant to possession proceedings, if a judgment has been given against him/her in possession proceedings within the previous 2 years or if he/she has been evicted pursuant to a judgment for possession.

In essence, a proprietor of a registered estate or charge will usually have one chance, but only one chance, to remove a squatter or regularise his/her position by the grant of a lease or licence.

Effect of registration: no effect on priority except in relation to registered charges (but not equitable chargees): Sched 6, para 9. Registered chargee loses its charge (just as registered proprietor loses his or her title), except where para 5(2)¾(4) applies. In relation to para 5(2), (3), normal rules of priority under Cls 28, 29 apply (chargee may, therefore, not be defeated by the squatter’s rights). In relation to para 5(4), chargee will never lose its charge. Rules of apportionment where the squatter is bound by a legal or equitable charge.

Special cases: trusts (Sched 6, para 12), foreshore (Sched 6, para 13), and rentcharges (Sched 6, para 14).

V: Dispossessed squatters

Provisions to cover the following case: a squatter who has been in adverse possession for 10 years and could therefore have applied to be registered under Sched 6, para 1. Before he/she does so, the registered proprietor re-enters and takes the land back into his/her own hand. The Bill enables the squatter to apply even though he/she is not in adverse possession immediately prior to the making of the application: Sched 6, para 1(2). See too Sched 6, para 5(5).

VI: Possession proceedings

Because there is no period of limitation applicable, it will always be open to a proprietor of a registered estate or charge to take possession proceedings against a squatter. The Bill creates defences that mirror the position where there is an application to register. It should be noted that if a judgment for possession against a squatter is not enforced within 2 years, it ceases to be enforceable and the proprietor has to start proceedings afresh: Cl 97(2). Why?

The defences are as follows:

1. A squatter who has a claim based upon estoppel or has some other right to the land can assert it. Even if he or she would not be entitled to the land by reason of proprietary estoppel, the Adjudicator, or on appeal, the High Court, can give effect to his/her equity in the appropriate way: Cls 108(4), 109(3).

2. If a squatter would have been entitled to be registered under Sched 6, para 5(4), that is a defence to possession proceedings: Cl 97(1). He or she is entitled to be registered: Cl 97(5).

3. If a squatter would have been entitled to be registered under Sched 6, para 6, that is a defence to possession proceedings: Cl 97(3). He or she is entitled to be registered: Cl 97(5). NB Cl 97(6) (to cover the case where a squatter’s application to be registered was rejected, judgment for possession was obtained against him/her, but no steps were taken to enforce that judgment for 2 years: the judgment becomes unenforceable).

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