Possessory title, sometimes called ‘squatters rights’, is the term generally applied to the legal title of someone who is in adverse possession of a property. More specifically it is a class of property title which may be registered by the Land Registry in appropriate circumstances.
From the Conveyancing point of view, this only becomes important when the squatter wants to sell a property, because the buyer’s Solicitors will have to consider whether the seller has an adequate title which can be transferred to the buyer.
The term has usually been applied in the past where a squatter can show adverse possession for more than 12 years. That is because the true owner’s right to bring possession proceedings would then generally be ‘statute-barred’ under the Limitation Act 1980, although there are important exclusions to this 12-year period, e.g. for Crown land. Also the true owner might still be able to bring a successful claim outside the period by arguing that the squatter had not actually been in adverse possession or that he was occupying with the owner’s consent.
The Land Registration Act 2002 substantially changed the law relating to registration of possessory titles, and a squatter may now be able to obtain full freehold title to land in some circumstances.
Where no existing title to the property is registered at the land registry they may agree to register an occupier with possessory title, if they are satisfied with the evidence of occupation. The registry will also often register only a possessory title where the old title deeds have been lost.
The Risk of Buying with Registered Possessory Title
Anyone buying a property with registered possessory title will not get any better title to the property than the seller had, so there is a potential risk that the true owner could make a successful claim for possession. Consequently Conveyancing Solicitors recommend that indemnity insurance is obtained to protect the buyer against such an eventuality.
Under the 2002 Act, if a title is already registered at the land registry, then a squatter can apply to be registered in place of the registered owner once they have been in adverse possession for at least 10 years. The registry will then serve notice on the existing registered proprietor, and if no objection is received and they are otherwise satisfied that the application is in order, the applicant will be registered as the owner of the property in place of the original owner. The squatter would therefore get the full freehold title. But if the registered owner does object the squatter would not get any title.
Buyers’ lawyers will now usually require a seller claiming title by adverse possession (or who has lost their old title deeds) to become the registered proprietor in one way or another, either by applying for registration if title is not already registered, or getting themselves registered as the proprietor of an existing title. This is to ensure that a buyer will not have any difficulty in having the title registered after completion.
Property owners are now recommended to get title registered if this has not previously been done, and to ensure that their registered address remains correct so that they will receive any notices – up to three addresses for service can now be included on the register.