Do squatters have any rights?
Squatters, who move into someone’s property or who acquire an extra piece of garden, may mutate from wrongful trespassers into lawful owners. Squatters can, indeed, under the correct conditions, have rights. Lawful owners may find that they are debarred from bringing an action to recover their land if they delay too long.
These rights spring from the statutes of limitation, currently the Limitation Act 1980. The effect of the statute is not to convey title to the squatter. Instead it works by extinguishing the right of the original owner to recover the land from the squatter.
It should be distinguished from the doctrine of prescription which is a concept stemming from Roman law and still favoured in the Scottish and continental legal systems. In English law, prescription is limited to easements and profits a prendre. Prescription and limitation are opposite sides of the same coin. Prescription operates where title is acquired as of right, with limitation, title is acquired as of wrong.
The legal position
Section 15(1) of the Limitation Act 1980 provides:
No action shall be brought by any person to recover any land after the expiration of twelve years from the date on which the right of action accrued to him or, if it first accrued to some person through whom he claims, to that person.
Section 17 provides that at the expiration of the period prescribed by the Act for any person to bring an action to recover land, the title of that person to the land shall be extinguished. Thus, the effect of section 17 is not to transfer the title of the original owner, but is to extinguish it by barring the remedy.
At the end of the period of limitation, a person (or several persons claiming through one another) who has been in possession of land adversely to the true owner will receive a possessory title. Such a possessory owner will take the land subject to existing easements and restrictive covenants (Re Nisbet and Potts Contract [6] 1 Ch 386), but not to rights which are based on an implied grant, such as a way of necessity: see Wilkes v Greenway (1890) 6 TLR 449.
It may be that a series of trespassers have occupied the land and together they have clocked up 12 years possession. The one who is in possession at the expiration of the period will be able to establish a possessory title even though he cannot show 12 years of personal possession. A person in possession has an interest which can be transmitted to the next possessor claiming through him and which is good against everyone except the rightful owner.
This possession must be continuous. If A adversely possesses for 11 years and then transfers his interest to B who immediately moves into the property, then, after one year, B will have a possessory title. If, on the other hand, A abandons possession after 11 years with nobody succeeding him, then the clock will have stopped running.
When does the clock start to run?
This will be either when the paper owner is dispossessed by another or when he discontinues possession and the squatter takes possession.
What sort of possession is adverse?
It is necessary for the squatter to show that the land was used in a manner inconsistent with its enjoyment by the paper owner. In the past this has caused some difficulty for the squatter. If the paper owner could show that some future use was intended for the land, and the acts of the squatter were not inconsistent with that future project, then adverse possession had not taken place. The paper owner was not debarred from bringing an action to recover the land. So, a property developer, for example, who was holding land for future development perhaps awaiting the best commercial opportunity or a favourable housing market, could argue that the squatter’s possession did not substantially interfere with these future plans. Thus, the possession was not adverse.
This special rule was formulated originally over 100 years ago by Bramwell CJ in Leigh v Jack (1879) 5 Ex D 264, and then by Sir John Pennycuick in Treloar v Nute (1977) 1 All ER 230. It was, in fact, abrogated by para 8(4) of Schedule 1 to the 1980 Act which provides:
For the purpose of determining whether a person occupying any land is in adverse possession of the land it shall not be assumed by implication of law that his occupation is by permission of the person entitled to the land merely by virtue of the fact that this occupation is not inconsistent with the latter’s present or future enjoyment of the land. This provision shall not be taken as prejudicing a finding to the effect that a person’s occupation of any land is by implied permission of the person entitled to the land in any case where such a finding is justified on the actual facts of the case.
Lord Denning, in the earlier case of Wallis’s Cayton Bay Holiday Camp Ltd v Shell-Mex and BP Ltd [5] QB 94, had introduced the doctrine of the implied licence. Under this, it was implied that the squatter had been given a licence to occupy the land pending future development. The 1980 Act does not exclude such a finding. Indeed, in the latest case on this point, Buckinghamshire County Council v Moran [1989] 2 All ER 225, Slade LJ accepted the viewpoint that, in determining whether acts amount to dispossession then one should consider the character of the land, the nature of the acts and the intention of the squatter.
The conclusion will depend on the facts and circumstances of the case. While it cannot be said that there is now a rule that the acts of a squatter on land which is retained for future purposes may never amount to possession, such facts would certainly be taken into account.
In Buckinghamshire County Council v Moran the affected land was held by the county council for future road-building purposes. Local authorities across the country must, between them, retain large tracts of land for such purposes which stand as waste land (where they are not used for car parking), for many years. If neighbouring land owners take over these plots and enclose them as part of their gardens, then there is clearly a risk that in the due course of time they will be able to establish the necessary animus possidendi (intention to possess) and thus oust the local authority.
The position of a purchaser
A purchaser of land where the vendor has a possessory title will be obliged to accept such a title. However, in order to prove good title the squatter must show who was the true owner of the land and that that person’s title has been barred. Provided, however, the squatter can do this, then even an unwilling purchaser will be obliged, by court action if necessary, to accept the title: see Re Atkinson & Horsell’s Contract [2] 2 Ch 1; George Wimpey & Co Ltd v Sohn [1967] Ch 487.
Mortgages
Where a mortgagee has been in possession for 12 years, then the mortgagor may not bring an action for redemption (section 16).
Settled land and land held on trust for sale
It is possible for an equitable interest in land as well as a legal estate to be extinguished (section 18(1)). However, if time has run against a legal owner of land but not a beneficial owner, then the title shall remain vested in the tenant for life or other statutory owner. So, while a beneficiary, a remainderman for example, retains the right to recover the land, the title cannot be extinguished.
Leases
It may be the case that a squatter takes possession of leasehold premises ousting the tenant and, therefore, succeeds in barring the tenant’s claim. What is the position of the freeholder?
As a freeholder is not able to gain possession against the original tenant he will only be able to oust the squatter if the tenancy merges with the freehold. This would happen where the tenant acquires the freehold or surrenders the tenancy: see Fairweather v St Marylebone Property Co Ltd [3] AC 510.
But, there is a complication where the land is registered. If the squatter has acquired a registered title then the original tenant no longer has a lease capable of being surrendered or merged with the freehold: see Spectrum Investment Co Ltd v Holmes [1] 1 WLR 221.
Competing squatters
So, it is clear that, once the period of limitation has expired, a squatter may establish a possessory title.
But the question posed at the outset “Do squatters have rights?” raised the issue of the rights a squatter may have during the course of the acquisition of the title. Until the true owner’s right of action is barred, then he cannot be resisted. But a squatter can exclude all others. He can even sell the land and transmit to the purchaser a right effective against all except the paper owner.
Thus does the layman’s expression, “squatter’s rights”, have a legal basis.
