(continued from part 1 - which you can find HERE)Under the Act, what amounts to 'adverse possession' still applies; one still has to show 'factual possession' and an 'intention to possess' the land. Furthermore, the Limitation Act 1980 does not now apply to registered land, and there are no human rights issues.
It is only a successful application under the Act which gives title to registered land. An application can be made where a person in adverse possession relies on 10 years' adverse possession ending on or after 13th October 2003. So, if a person started occupying registered land, say, on 20 January 1999, he could today only make an application under the Act.
Upon receipt of an application under the Act, Land Registry sends a notice to the existing registered owner and any mortgage lender, if there is one. If no counter-notice is sent by the owner or lender, the applicant will become the registered owner, free of any mortgage.
A counter-notice can require the applicant to satisfy any one of three conditions before he is entitled to become the new owner. He can succeed if he can demonstrate that the owner of the land, in some way, allowed him to believe mistakenly the land was his, and as a consequence of that belief, he spent money building on it, or altering it in some way. If it is not too unjust to the owner, the applicant will be registered; otherwise, an alternative remedy would have to be given.
Secondly, an applicant can succeed if he can show 'some other reason why he should be registered as owner'. For example, the applicant may have purchased the land from his neighbour without completing the right paperwork, which only comes to light several years later.
Finally, if an applicant can show that there has been a 'reasonable mistake as to the boundary', he can succeed on this ground. The applicant has to show that the land he is claiming is adjacent to land he already owns and which for the last 10 years he (or any predecessors to him) reasonably believed belonged to him. The land being claimed must also have been registered for more than one year before the application.
The owner may simply object to the application, without requiring the applicant to satisfy one of the conditions - it might be disputed, for example, that the trespasser has been in adverse possession for 10 years. If an objection is received, the objection will have to be disposed of, if it is not groundless, by agreement between the parties, or the adjudicator to HM Land Registry - If an application is rejected by Land Registry because, for instance, the applicant does not
satisfy one of the conditions, the applicant has a right to make another application after two years if he has not been evicted and he is still occupying the land, subject to some exceptions. Upon a new application, he will be registered as the new owner.
If an applicant is successful, he takes the land free of any mortgage affecting the land unless the application succeeded as a result of satisfying one of the three conditions. In these circumstances, the applicant is subject to any mortgage affecting the land, but he now has the right to have the mortgage apportioned between the land he has acquired and the remainder, if there is any, based on their respective values.
Is a purchaser affected by squatter's rights…?
Because unregistered land could have unwelcome guests on it, a person buying it should check it for any obvious signs of a trespasser. A purchaser will take the land subject to a squatter's rights if he knows about them (i.e., he has been told) or he would have had knowledge of them had he looked carefully at the land (i.e., the signs of occupation were there) and asked questions of the seller or trespasser.
(Continued in Part 3 - HERE)