How to handle adversely possessed land when buying or selling

Adverse possession (also known as “squatters rights”) is the process where someone occupies and makes use of land for which they are not the legal owner of and they occupy and use the land without the consent of actual legal owner. Such an occupation can give rise to possible ownership claims and the occupier can ultimately be granted legal ownership of the land if they apply to the Land Registry with sufficient evidence to satisfy their requirements.

Adverse possession can also apply where you think you own a parcel of land but you have no evidence of ownership in your registered and/or unregistered deeds. To resolve this issue, you can make an application to the Land Registry for adverse possession.

Given that adverse possession is a drastic way of changing land of ownership, careful consideration and legal expertise is required to deal with the once adversely possession of land, regardless of whether you are buying or selling the property. Legal professionals can help assess and determine the legal effects of adverse possession and provide advice on how to proceed.

In the case of a conveyancing transaction, here are steps to deal with an adverse possession situation:

Investigate the land

If you are buying the land, you will need to determine if the land in question has actually been adversely possessed. Your lawyer can determine this out by reviewing your title deeds and they can access these from the Land Registry portal if the land is registered.

Where the land being purchased is unregistered, your lawyer will need to review any original title deeds that the seller may have in their possession.

You may also decide to instruct a surveyor to conduct a survey of the land.

Negotiate the terms

If you are buying land that is or can be subject to adverse possession, you can negotiate terms with the seller regarding the potential liabilities and responsibilities associated with the adverse possessor. This may include negotiations and agreements to resolve the issue (which should be resolved prior to exchange of contracts) and possibly to reduce the purchase price.

Title Insurance

If you are buying land that is or can be subject to adverse possession, discuss with your lawyer to see whether you should obtain a title indemnity policy to protect against any future claims arising from adverse possession.

Disclosing information to buyers

If you are selling land that is or may be subject to adverse possession, disclose this information to potential buyers under the section for claims and disputes relating to ownership of the Property Information Form (TA6 Form). Transparency is essential to avoid legal claims and to maintain the trust of your buyer.

Resolve Disputes

As adverse possession is a contentious issue, it is unlikely that potential buyers would exchange contracts until the dispute regarding the land’s ownership can be resolved. Therefore where you are selling the land, consider instructing and working with lawyers experienced in property disputes. They will be able to assist you with any negotiations, mediations, or general litigation, depending on the circumstances.

Regularise any agreements

Where issues with the adverse possessor is resolved prior to the sale/purchase, ensure that the agreement terms are put into writing and that they are binding on the parties and any successors to the parties. This is to ensure that the agreement accurately reflects the status of the land and help clarify the rights and obligations of all parties involved.

You will also need to ensure that Land Registry requirements and procedures are complied with, as failure to do so could result in further legal disputes and challenges to the land’s ownership.

Exchange of contracts

Once all issues related to adverse possession have been resolved and all other stages of the purchase/sale has been complied with to your satisfaction, proceed to exchange of contracts.

How Pinney Talfourd can help?

Navigating adverse possession has potential risks and requires careful attention to legal details. By working closely with lawyers and taking appropriate measures to address the issue, you can minimise uncertainties, resolve any disputes and ensure a smooth conveyancing  process. 

For more information please contact our Residential Property and our Residential Property Litigation departments.