Elizabeth Newson
Posted on 11 Dec 2019

Adverse Possession and the impact on development sites

Average read time: 2 minutes.

Last week the Transactional Real Estate team delivered a seminar on the topic of adverse possession , also known as squatter's rights, to a developer client. This is a complex topic which many developers are faced with when acquiring and developing land. There are numerous ways in which adverse possession might impact on a development site, including, encroachments onto the site, the impact of part of the site having possessory title rather than absolute title, unregistered parcels of land and how a claim can be made for adverse possession.

The law relating to adverse possession changed in 2003 so that, if a squatter was in possession for the requisite period prior to the change in the law, the old rules would apply.

A very brief summary of the rules since 2013 are as follows:

The squatter must have:

  • possessed the land;
  • intended to possess the land; and
  • possessed without secrecy, force or permission,

for 10 years (in the case of registered land) or 12 years (in the case of unregistered land).

In the case of registered land, if the registered owner objects, the squatter must also satisfy one of the following conditions:

  • It would be unconscionable because of the equity of estoppel for the registered proprietor to seek to dispossess the squatter, i.e. the registered proprietor encouraged or allowed the squatter to believe that they owned the land in question in some way, the squatter acted to their detriment and it would be unconscionable to deny the squatter the rights they believed they had.
  • The squatter has some right to the land, e.g. a contract to buy the land which was not completed or is entitled to the land under the will or intestacy of the deceased proprietor.
  • The squatter owns adjacent land for at least 10 years and are reasonably mistaken as to the boundaries.

Points that we discussed last week (and which we often come across when advising on the acquisition of development sites) include:

  • the practical impact of having no title or possessory title rather than absolute title to part of a development site, the impact this may have on layout, plot sales and adoption agreements;
  • what to do to try and prevent encroachments and what to do if you notice an encroachment;
  • unregistered gaps between the boundary and the highway; and
  • the importance of site visits and overlaying plans.

If you have any further questions with regards to adverse possession, please contact Elizabeth Newson.