Modern Day Squatting- Adverse Possession Explained:

Adverse possession has recently been a hot topic in the media, following the “Sydney squatter” who could effectively gain equitable interest and “fee simple ownership” of a multi-million dollar Sydney mansion, without paying a cent. This is completely legal.

Adverse possession exists due to the historical notion of “squatting” as a form of ownership due to there being no system of deeds or registered title to record ownership of land. However, despite its archaic nature, squatting is well and truly alive in the form of adverse possession, and it is a lot more common than you may think!

Adverse Possession Definition:

Adverse possession is a method of claiming ownership to land by maintaining possession of the said land for a long period of time. The possession of the property must indicate a control of the land and be accompanied with an intent to possess the land. This possession of the land can extinguish the true owner’s right to retain the land if it continues for a specified period, which in Victoria is a minimum of fifteen years.

All land apart from council land, Crown land, land owned by a Water Authority or Victorian Rail Track can be subject to a claim of adverse possession.

Elements of an Adverse Possession Claim:

In Victoria, there are 3 main conditions which need to be satisfied in order for an adverse possession claim to be successful; Actual Possession of the land, Intention to Possess the land, and this having been continued for 15 years.

Actual possession

Although the law recognises title by ‘squatting’ it also puts limits on this form of title by requiring any possession of the property to be peaceful. Hence, most adverse possession claims are through land neighbouring vacant land rather than someone’s residential property. The Sydney Mansion case is remarkable in this regard as it shows how someone can take possession of a property when it is left vacant by an overseas proprietor. The court’s also look at the nature of the possession to determine whether it indicates a sufficient control of the land, as a mere use of the land would not be sufficient.

Intention to possess

The adverse possessor must have an intention to possess the land. Once again, use of the land that indicate control of it and which corresponds with the nature of land (farming land for example) will be evidence of an intention to possess the land.

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15-year period (Time Limitation)

The necessary period of 15 years commences once the above two elements are clear. However, there are also extension provisions to protect your right to the land from being extinguished where the property is leased or under the interest of another. On the other hand, the law also encourages responsible management of your title by allowing the “squatter” to rely on any previous adverse possessor on the property to make up the necessary period of 15 years.

How to protect yourself:

In order to protect your title of the property all you need to do is take reasonable steps to ensure your land is surveyed and the boundaries are correctly outlined and secured (vacant, under lease etc). If the property does come into possession of another, you can prevent their claim by making an effective re-entry onto the land. This may mean changing the locks, putting an alarm system in and commencing building work on the land. Interestingly, a formal notice for them to exit is insufficient to deny their claim.

Example Scenario:

You recently purchased a 50-hectare piece of land. While you are not yet living on the land you allow your neighbour to graze his cattle on a section of the land. After a few months you still have not yet moved onto your land and your neighbour has now built a fence joining a portion of your land with his to keep his cattle in. A year passes your neighbour has placed a gate with a lock and key on that fence to control the access to that portion of your land. If this possession of the land were to continue for 15 years, then the neighbour could claim title to that portion of the land.

This example is entirely possible. Contemporary adverse possession claims also relate to partial claims of property due to moving of fence lines. Hence although the Sydney mansion adverse possession claim is a rarer claim of adverse possession, it goes to show how a failure to take reasonable steps to care for your property can result in losing it!

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