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What is adverse possession?
Adverse possession allows a squatter to obtain a right to possess land by occupying it long enough under the Limitation Ordinance (Cap. 347) to "extinguish" the original owner's title.
Except for government land, no action to recover landed property is allowed after 12 years from the date upon which the right of action accrued. Time starts to run when the owner has been dispossessed of his land and the squatter has taken exclusive possession.
Establishing adverse possession requires proof that the squatter has possessed the land as a matter of fact; and the squatter intends to possess the land to the exclusion of the whole world, including the original owner.
 
What is the existing land registration system? 
There are two major land registration systems in common law jurisdictions: the deeds registration system, which is a register of documents; and the title registration system, which is a proof of ownership.
The existing system in Hong Kong is the deeds registration system. The Land Titles Ordinance (Cap 585) was passed by the Legislative Council in 2004 but has not yet come into effect. Its purpose was to change the system to title registration.
Since the existing deeds registration system only registers the documents - and not a person's title - it gives no guarantee of a person's title. Even if a person is registered as the owner of a property, there might still be uncertainties or defects in his title to the property.
Hence, title to land is relative and depends ultimately upon possession.
However, after the ordinance comes into effect, the title register will be conclusive proof of ownership.
Ideally, with the title registration system, a person will no longer need to review numerous instruments such as prior transaction records when examining title to a property. But that would also mean squatter could claim not just a limited squatter's title, but a good title as a government lessee.  
 
What is the Law Reform Commission's proposal? 
The commission says that under the existing law of adverse possession the right of the original owner may be too easily taken over by squatters.
The commission proposes that a squatter should have to apply for registration after 10 years of uninterrupted adverse possession. The squatter can be registered only after the registered owner fails to file an objection within the two subsequent years. If the squatter is not evicted and remains in adverse possession for two more years after registration, then he should be entitled to make a second application that can be referred to an adjudicator.
 
What are the main suggestions? 
When title registration system is in place, adverse possession alone should not extinguish the title to a registered estate. The rights of the registered owner should be protected.
If, for example, the registered owner cannot make the required decisions because of mental disability, or cannot communicate such decisions because of mental disability or physical impairment, then a squatter's application will not be allowed. But, such protection would not be absolute. Under the proposed scheme, a squatter of registered title land will only have a right to apply for registration after 10 years of uninterrupted adverse possession.
The registered owner will be notified of the squatter's application and able to object to it.
If the registered owner fails to file an objection within the stipulated, then the squatter will be registered.
If the registered owner objects, the squatter's application will fail unless he can prove any of three conditions:


		it would be unfair to dispossess the squatter because of some representation that made the person believe they could continue to possess the land



		the applicant is for some other reason entitled to be registered as the proprietor of the estate.



		the squatter has been in adverse possession of land adjacent to their own under the mistaken but reasonable belief that they are the owner of it.

If the squatter is not evicted and remains in adverse possession for two more years, then the squatter would be entitled to make a second application, and the matter can be referred to the adjudicator for resolution.
 
Send your legal questions to bizpost@scmp.com.


Filling in the gaps on squatter's title

A residential building located at 107 Ma Tau Kok Road in Ma Tau Wai. A tenant on first floor successfully claim the ownership of the flat by adverse possession, after the owner has been missing for 26 years. Photo: Oliver Tsang

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Mayer Brown JSM partner Alan Yip discusses the Law Reform Commission proposal to overhaul the law on adverse possession


Filling in the gaps on squatter's title

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Mayer Brown JSM partner Alan Yip discusses the Law Reform Commission proposal to overhaul the law on adverse possession

Mayer Brown JSM partner Alan Yip discusses the Law Reform Commission proposal to overhaul the law on adverse possession