If you own a home which you don't live in, you should be worried about the possibility of a squatter getting legal title to your property.
You might think that would be less of a problem now that squatting in residential building is a criminal offence.
But a High Court judge has recently decided that a long-term squatter of a property in London can still be allowed to get legal title to a house in place of the existing registered owner despite the fact that the squatter is apparently committing a crime.
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The new law only makes it a criminal offence to squat in a residential building. So it is no help against squatters who are occupying non-residential property or undeveloped land.
Indeed in the recent case it was pointed out that the squatter might have a valid claim to possessory title of the garden land adjoining the house even if his claim for title to the house itself failed, since the garden was not a 'residential building'.
Furthermore if the property title is registered at the Land Registry a squatter only needs to occupy a property for ten years nowadays, not twelve, before being able to apply for title.
An owner failing to take action against squatters will lose title to their land
It is important to note that if a squatter then succeeds in satisfying the Registry that he is in 'adverse possession' of a property he or she will be registered with absolute title in place of the existing owner. So the existing owner who takes no action will lose their title completely.
It is probably unusual for anyone to lose a house to a squatter, as most owners will take steps to evict squatters long before they could try and claim title by adverse possession. But there have been several cases where squatters have successfully claimed title in this way.
And there have been many more cases where squatters have obtained title to land or other types of property.
The current law on 'squatter's rights'
There is some confusion about the current law on what is often called 'squatters rights' or possessory title. This is largely because there are now two separate regimes depending on whether or not the title to the property in question is registered at the Land Registry.
The old law still applies to unregistered land. This says that an owner is statute-barred from bringing an action for possession of land (including buildings) if twelve or more years have elapsed since the right of action accrued. (Limitation Act 1980)
In other words, you cannot start legal action to evict a squatter who first entered your property twelve or more years before and has remained in uninterrupted adverse possession since then.
Not only is the right of action barred but the Limitation Act says that the true owner's title is actually extinguished!
The same law used to apply to registered land. But it was long felt that this was wrong, because the whole idea of land registration was that once a title was registered it was supposed to be state-guaranteed and indefeasible.
The Land Registration Act 2002 introduced a whole new regime for claiming possessory title to registered land.
How a squatter can now claim title to registered land
This Act now makes it more likely that a registered proprietor will be able to prevent an application for adverse possession of their land being completed.
For this reason any owner whose title is still unregistered is strongly advised to apply for registration straight away. Although a fee is payable as well as any legal costs, once a property is registered it is now much harder for squatters to obtain title.
Even if a squatter occupied the property before the title was registered the provisions of the 2002 Act will apply once title is registered.
The twelve-year rule no longer applies to registered land
The most important (but often overlooked) provision of the 2002 Act was to dis-apply the Limitation Act to registered land. As the old twelve-year rule no longer applies a registered owner can start possession proceedings against a squatter at any time, no matter how long ago the squatter took possession of the land.
However squatters can now apply to be registered as the owner of land after being in possession for ten years. Although this seems to give squatters the benefit of a shorter period than under the old law, the Land Registry must now give the registered owner notice of any such application.
It is therefore very important for landowners to ensure that the Land Registry always has an up-to-date address for them.
In fact the Registry will now register up to three addresses for an owner, one of which can be an email address. An owner can thus now include the address of their solicitor or other professional adviser as well as their personal address.
What to do if you receive notice of a squatter's claim
If notice of an application from a squatter is received then the owner can object, as well as taking possession proceedings. If the property is a house then the owner could also ask the police to take appropriate action as the squatters will now be committing a criminal offence.
But none of these courses of action will guarantee that the Land Registry will refuse to register the squatter in place of the proper owner. The 2002 Act does set out certain cases where a squatter can still succeed in claiming title even if the owner objects.
And as mentioned before, even if the property is a house the fact that squatting in such a property is now a criminal offence may not be a bar to a successful title claim by a squatter.
The law relating to adverse possession is quite complicated. So if you find a squatter has taken possession of property belonging to you the best thing is to take immediate legal advice. Direct action is not recommended as this may itself amount to a criminal offence.
If the property in question falls within the statutory definition of a 'residential building' then the police now have powers to arrest squatters and therefore remove them from the property.
Should you receive a notice from the Land Registry about a claim you should also get legal advice straight away. The Land Registry cannot give individual advice although there is a considerable amount of information available on their website.
Making a formal objection is not straightforward
It is not sufficient to just reply that you object to the application. A written statement signed by the owner or their conveyancer must be submitted setting out the grounds of any objection together with other information required by the Registry.
There are also strict time-limits for serving such an objection so prompt action is required.
If an objection is received then the squatter's application cannot be determined until the objection is disposed of, unless the Registry is satisfied that the objection is groundless. If they decide that the objection is not groundless, both parties will then be asked if they are willing to negotiate a settlement. If so the Registry will allow them time to settle the matter by agreement.
However, as soon as it becomes clear that the two sides are unable to reach an agreement, the Registry must refer the matter to the tribunal. This will be done immediately if the parties do not wish to negotiate.
Even if the squatter’s application is rejected they will be able to reapply to be registered as proprietor if they remain in adverse possession for a further two years from the date of rejection of the previous application.
This means that the registered proprietor (and anyone else given notice of the rejected application) have at least two years in which to take steps either to evict the squatter or at least to start proceedings to do so. or to legitimise their occupation by, for example, negotiating a licence under which the squatter can stay as licensee.
Once a squatter's claim has been accepted the Registry will amend the registered title to show the squatter as the outright owner of the land – they do not just get a possessory title, but full legal title.
It will then become very difficult to take further action, so it is much safer to take appropriate legal action at the earliest opportunity.