Adverse possession - can a person who believes they are a tenant acquire title by adverse possession?
In Ofulue v Bossert, B claimed title by adverse possession to a property owned by O. Until the Land Registration Act 2002 came into force, all cases of adverse possession were governed by the Limitation Act 1980. This provides that an action to recover land cannot be brought more than 12 years after it first accrued.
Adverse possession will only be established if the applicant can demonstrate not just factual possession but also an intention to possess the land. In the case of J A Pye (Oxford) Ltd v Graham, the House of Lords held that the fact that the Grahams would have been willing to pay rent for the land did not mean that they did not have the requisite intention to possess.
In Ofulue v Bossert, B had appeared to believe that he had a tenancy of the property from O. B was not paying any rent, although he did carry out substantial works to the property. In fact no tenancy had been granted. The Court of Appeal found that the fact that B believed himself to be a tenant did not mean that he did not have the intention needed for an adverse possession claim to succeed, since what is required is not an intention to own the property but an intention to possess it.
Under the Limitation Act, the 12 year period will start to run afresh if the person in possession acknowledges the title of the paper owner. In this case B had made an offer to purchase the property from O. O argued that this was an acknowledgment of his title which would have the effect of starting the clock running again from the beginning.
Unfortunately for O, the offer was made during possession proceedings commenced by O and was contained in a letter marked 'without prejudice'. As such, the usual rules of evidence applied and the letter was inadmissible. Neither was B's initial claim that he was a tenant an acknowledgment of title for the purposes of the Act. The relevant question in the dispute was who had the better claim to possession, and B had not acknowledged that O was entitled to possession.
Things to consider
Where a person in possession of registered land had not completed 12 years' adverse possession prior to 13 October 2003, the new procedure under the Land Registration Act 2002 will apply to determine their claim. Under the 2002 Act, it is much harder for registered proprietors to lose title to squatters.
Owners of unregistered land should therefore consider applying for voluntary first registration, to gain the protection of the mechanism in the 2002 Act. This is particularly the case given the decision of the Grand Chamber of the European Court of Human Rights in J A Pye (Oxford) Ltd v United Kingdom, which held that the procedure under the Limitation Act outlined above does not infringe the European Convention on Human Rights.
This analysis was written by Sarah Allen (email@example.com), associate in Wragge & Co's Real Estate group.
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This analysis may contain information of general interest about current legal issues, but does not give legal advice.