Property Law and Acknowledgement of True Ownership - Assignment Example

ANS Prior to the Land registration Act of 20021, the Limitation Act of 19802 specified a limitation period of twelve years after which those in adverse possession could apply for the title to the land3. The limitation therefore subordinated the rights of the paper owner to recover the land, so that the squatter’s possession becomes impregnable, “giving him a title superior to all others”.4 Pre conditions to invoke such impregnable possession included physical occupation of the property5. “Factual possession signifies an appropriate degree of physical control…….. ……broadly, I think what must be shown as constituting factual possession is that the alleged possessor has been dealing with the land as an occupying owner might have been expected to deal with it and that no-one else has done so.”6 Another condition that may invoke such possession right includes an intention to possess the land7 without the consent of the actual owner8. One of the salient points noted by Browne Wilkinson in allowing the judgment for the defendant was the issue of whether the defendant squatter had “dispossessed the paper owner by going into ordinary possession of the land for the requisite period without the consent of the owner.”9 Adverse possession will not be valid if the illegal occupant gives written notice of the true owners10 or if the actual owners physically occupy the land. After twelve years of occupation, the squatter on a land may apply for registration of title as proprietor of a new or registered estate11. Therefore, by way of these limitations, the granting of title to the squatter was provisional and the required time period had to elapse before a squatter could legally claim the title to the land. However, the issue of ownership did not rise in this case. But according to the provisions of the new Land registration Act12, which came into force on 13 Oct 2003, squatters may directly put in an application for ownership. The law relating to adverse possession has undergone several changes, whereby the issue at stake is not title to the land, so much as direct ownership of the land, either by the squatter or the paper owner. In a recent case, the Court suspended the possession order against a widowed mother who had enjoyed possession of land for thirteen years13. However the Land registration Act of 200214 clarifies that no matter how long the possession of the land, it will not bar the paper owner’s title to the registered land. Adverse possession in itself will not give the squatter the right to register the land. A squatter will be entitled to apply for registration of the land14 and the rules to be followed have been clearly set out. 15 The application must be made on an ADVI form and be accompanied by a statutory declaration. The owners must be notified and there is no guarantee of success if the land is registered, even if fences have been erected by the squatter.16 If there is opposition by the owners, the squatter’s application will be rejected unless he can prove the following17 (a) he is entitled to be registered as proprietor through some compelling reason (b) the equity of estoppel would render it unconscionable to the proprietor to displace the applicant (c) in certain cases when the squatter’s property adjoins the land in question.18 Those who have acquired title by adverse possession before the Land registration Act of 2002 will retain their titles and not lose it. In some cases, the old rules regarding adverse possession may still apply. For example in the case of Topplan estates Limited v Townley19, the Court held in favor of the defendant and stated that the law of adverse possession was justified when the paper owner made no effort to oversee the property; “A period of 12 years is a long period during which to neglect a property completely.”20 However, by allowing the squatter the right to apply for ownership to the land, the Land registration Act has shifted the issue of possession of land from that of purely physical possession to the necessity to demonstrate actual ownership of title. After three years, squatters will have the option to apply for ownership only if they continue to remain in physical possession of the land for at least two more years over and above the ten year period specified in the Act. Through the provisions of the Act, the focus and thrust of land law has shifted from provisional title to actual ownership, through the provision of registration for ownership. Ans 2: In the case of Ms. Flite, the doctor has executed a mortgage deed with her whereby he has borrowed the sum of 50,000J against his home. Therefore, through this deed, Miss Flite has gained possession of the house until such time that the doctor returns the money he has borrowed. According to the Limitation Act of 198021, the time limit for action on a simple contract is six years. However, a mortgage deed comes under the provision of a “specialty for which the period of action is twelve years; 22“no action shall be brought to recover any principal sum of money secured by a mortgage….after the expiry of twelve years from the date on which the right to receive the money accrued”. A mortgage deed was clearly identified as a specialty case in Aiken v Stewart Wrightson Members Agency Ltd23 and therefore Ms Flint has a right to claim either the ownership of the property of the doctor, or alternatively, demand that he compensate her for the loan she has made. In the case of Bristol & West v Bartlett24, the mortgage amount was discharged, yet there was a shortfall for which the bank demanded compensation and the Court held in the bank’s favor. Hence Ms Flint has strong grounds to press the Court for recovery of the sum she has loaned to the doctor from the proceeds of the sale, however, the time period for recovery of the interest would be six years. “That means that it has 12 years from the accrual of the cause of action to sue for the principal of the debt, but only six years to sue for interest." 25 In fact, Ms Flite can even contest the doctor’s right to sell his property and take over any part of the proceeds before paying off the mortgage deed. The mortgage deed gives her the ownership of the property and the right to sell the property. In the recent case of W. Bromwich Building Society v Wilkinson26, the bank that held the mortgage deed on a property was able to sell the property and also recover the shortfall from the borrower. Hence, Ms Flite would also have the right to sell the property herself and claim any balance owing on her original loan after receiving the proceeds of the sale from the doctor. In the event that the doctor has already sold the property, Ms Flite will be within her rights to claim the proceeds of the sale that the doctor makes. The doctor will only be able to receive any amount that is over and above the J50,000 that he has borrowed from Ms Flite, who enjoys the rights to ownership and possession of the property of the doctor until such time he has repaid her the monies he has borrowed. In fact, if the statutory time limitation of six years has not yet passed from the time of securing of the principal money by the mortgage deed, “in the absence of any appropriation by, first, the debtor, or, second the creditor, payments will go to discharge interest before they discharge capital.”27. Hence Ms Flite may even be able to claim interest on the principal sum, in addition to the mortgage amount itself. In the case of Bromwich v Wilkinson, Lord Hoffman held that Section 20(1) of the Limitation Act would not cease to apply even when the security was realized. Hence even if the Doctor sells his property, this would in no way diminish Ms Flite’s rights to seek redressal and recovery of her loan. Ms. Clare is not in such a good position as Ms Flite in a legal sense, because her rights to adverse possession under the Land registration Act of 200228 would be dependent upon a period of ten years having elapsed. Moreover, the law of adverse possession applies only when the possession is taking place without the consent of the owner; “If a person is in occupation of property with the consent of the owner he is not in adverse possession.”29 When a contract for possession of property has been entered into with the consent of the owner and intends to remain in possession as long as the owner permits him to do so would be deemed to be ineligible for adverse possession. 30 However, since the doctor was away and had made it clear that his intention was not to return, Ms Claire’s continued possession may be construed to be with the intention to possess the property and she would retain her right over the property even if it was sold. In fact, the criterion applied by Browne Wilkinson in the case of Pye would also be valid in Ms Claire’s case, since she dispossessed the doctor through her occupation of the back part of the house, just as Ms Flint has occupied the major portion of the house.31 Moreover, since the period of the initial contract has expired and no effort has been made by the doctor to renew the contract; no effort has been made by the doctor to return to his property or to maintain it in any way, Neuberger J’s grounds of neglect 32would also apply. Ans 3: Ans 3: The Land registration Act of 2002 addresses the interests of various parties. On the one hand is the issue of the squatters who have maintained full possession of the land without the owner’s consent with the intention to hold on to the land33. The issue of neglect of a property owner has also been addressed, since adverse possession would accrue to those who are able to prove the owner’s eschewing of his rights to his land.34 Those who have thus gained title through adverse possession will be entitled to retain their possession. The Land Registration Act therefore, seeks to endow rights to ownership to parties who have retained possession of land for a long time without the express consent of the owner and with the intention to possess the land. Those squatters who have become title owners through adverse possession will not be deprived of their property rights under the Act. The Act also addresses the rights of those who have registered their property before the implementation of the Act – they will not be affected in their ownership of the land. Especially if the land has been held in trust through the Land Registration Act35 , that person will be entitled to apply to be registered as the owner of the land. For the next three year period, the rights of the squatters will be binding on purchasers when tenants have been in actual possession36 But after the three year period, a squatter will have an overriding interest and may register for ownership of the land only if he still remains in possession.37 Thus, under the New registration Act, a squatter will be required to show that for the ten year period, he reasonably believed that he owned the land38 , therefore in the case of Pye v Graham, the Grahams would not have won the case under the new law. If a person in possession of a piece of land makes an offer to buy or sell the land, even if it specifies the “subject to contract” clause will be deemed to be an acknowledgement of title of the paper owner.39 When a person is in possession of a property with the knowledge and consent of the owner, then he will not be eligible for adverse possession40. When a person takes adverse possession but then enters into a consent agreement with the owner, he will not be eligible to apply for registration in his name41 Moreover, when license to use a land has been obtained from the owner and the licensee continues to remain in possession of the land, he will not be able to apply for adverse possession as established in the case of Trustees of Grantham Christian Fellowship v The Scouts Association Trust Corporation42 where Blackburn J held in favor of the Church, stating that: “The fact therefore that very many years passed without there being any contact between the Church and the Scout Group over the latters use of the disputed land, much less any acknowledgement of the continuing existence of the license, did not mean that somehow the license ceased to be operative.” 43 . Therefore, this is unlike the Pye case where the agreement had been made for a specified period, which had ended and the owner had taken no action to recover possession of the land. In the case of a tenant who acquires the title to a third party’s land by adverse possession, the ownership of the land will be deemed to belong to the landlord.44 When the squatter erects a fence, it may not necessarily be a ground for adverse possession under the Land Registration Act45 and it could also function as grounds against granting adverse possession if it serves to exclude the squatter from the land he is trying to claim46 The Land Registration Act has been structured in such a manner that it takes into account the rights of the squatters as well as the paper owners. By providing for a regular procedure whereby a squatter may apply for registration as the legal proprietor of the land, it endows the right to apply for legal ownership of the land to the squatter47. However, the structure of the procedure through the use of the requisite forms does not ignore the rights of the paper owners, who have the right to rebut such claims for proprietorship48. The period of possession has been reduced to twelve years, thereby facilitating the rights of the squatters, while at the same time, a time limitation of an additional two years has been set for pursuing such applications and a squatter will be eligible only if he continues to remain in possession of the land. Thus, it may be seen that overall, the Land registration Act has tried to address the differing needs of different parties to ensure some degree of fair dealing in property law. This bucks the trend set by cases such as Pye49 where there has been an element of injustice to the owners since the Grahams remained in possession of the property without rent and without compensation. ---------------------------------------------- References: * “Adverse Possession: Land Registry Act of 2002.” [Online] Available at: http://www.landregistry.gov.uk/assets/library/documents/fact_sheet002.pdf; accessed 12/4/2005. * Land Registration Act of 1925, Ch 21. [Online] Available at: http://www.swarb.co.uk/acts/1925LandRegistrationAct.shtml; accessed 12/3/2005 * “Land Registration Rules of 2003” [Online] Available at: http://www.opsi.gov.uk/si/si2003/20031417.htm; accessed 12/4/2005 * “Limitation Act of 1980” [Online] Available at: http://www.swarb.co.uk/acts/1980LimitationAct.shtml; accessed 12/3/2005 End Notes: 1. Section 15(1) of the Limitation Act of 1980 states: 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. 2. Section 29 of the Limitation Act of 1980 states: If the person in possession of the land....in question acknowledges the title of the person to whom the right of action has accrued- (a) the right shall be treated as having accrued on and not before the date of the acknowledgement;...... . Section 30 states that the acknowledgement of true ownership must be in writing and must be signed by the person making it Read More