Squatters' rights seem wrong, but possession isn't so simple

While adverse possession is a controversial principle it can help solve boundary disputes

PUBLISHED : Tuesday, 26 February, 2013, 12:00am
UPDATED : Tuesday, 26 February, 2013, 4:34am

If you wanted to buy a flat, you would probably talk to the person who seemed to be the owner, the person who had the keys and acted like they owned the place. Later, your lawyer would look at the title deeds to make sure the seller really was the owner.

The title deeds might not tell the whole story, though. For example, they would not tell you whether the ownership rights of the paper-title holder had been extinguished because someone else was in adverse possession of the property - such as squatters.

If someone other than the true owner keeps possession of a piece of land for long enough, they can defeat the rights of the person whose name is on the title deeds. The adverse possessor becomes the new owner of the land.

To achieve this, he or she must also have the intention to defend that possession - using lawful means - against anyone who tries to take it away.

In the case of private land, "long enough" means 12 years, if the possession began on or after July 1, 1991, or 20 years if the possession began before that date. The period is 60 years for government land.

The Limitation Ordinance stops owners from taking legal action to recover possession of their property from adverse possessors after the limitation period has expired - and extinguishes their title.

This may seem outrageous, almost a form of legalised theft. It also seems to cut across the respect for private property rights enshrined in the Basic Law. Adverse possession undermines the idea that the title deeds are a definitive record of ownership.

On the other hand, the doctrine of adverse possession can make sure that land is not left idle. It forces owners to bring possession proceedings while the evidence of their ownership is still fresh and readily available.

Adverse possession is particularly useful as a way of dealing with boundary disputes. Lawyers often use plans to identify property in contracts and title deeds. Plans, though, can be imprecise when it comes to fixing the boundaries between neighbouring properties. Meanwhile, the neighbours may well have respected a certain boundary line for a long period of time, thinking that it was reflected in the title deeds.

If the deeds are at odds with the situation on the ground, adverse possession will give priority to the line observed in practice. It is a useful device to tidy up the ownership of boundaries.

The Law Reform Commission of Hong Kong recently published a consultation document on reforming the law of adverse possession. It recommended keeping the doctrine of adverse possession.

The commission suggested that it may be appropriate to impose severe restrictions on the doctrine when Hong Kong moves to a full land registration system.

Once that happens, adverse possession will clash with the concept that entries in the land register are definitive proof of ownership.

Even then, the commission believes adverse possession should continue in some form to deal with problems, such as uncertain boundaries.

Professor Michael Lower teaches and researches in land law. He is an associate professor in the Faculty of Law at Chinese University.