"Use it or lose it" – squatting your way to adverse possession
Updated: Mar 10, 2022
Adverse possession of the land, otherwise known as squatters’ rights, is a way of acquiring ownership rights despite the lack of title to the real property. Contrary to what might seem, more and more institutional investors are filing applications to declare adverse possession of a land. One of the most interesting cases I have come across recently is the story of Australian Retirement Holdings Pty Ltd. - who claimed adverse possession of a land. Although the Australian developer lost the case in September 2021 (case NSWSC1158), the analysis of the case led me to conclude that notwithstanding that the Polish and Australian legal systems are different, the basic criteria for recognising the establishment of adverse possession are quite similar.
Adverse possession is a derogation from the general principle of inviolability of property rights. The rightful owner of land may lose the land if in realitythey do not use the property and someone else uses it as if they were the owner. In common law systems this mechanism is fittingly referred to as the "use it or lose it" rule. However, as it turns out, proving that the property was used in the capacity of an owner is not easy. First of all, one must sufficiently manifest one's authority to the outside world and maintain it for a sufficient period of time.
The case I have referred to concerned an application by the owner of the Mount Gilead Estate for senior citizens in Sydney. The owner sought a declaration that the real property of Mr and Mrs Pritchard, which lay between the estate and a local road, was subject to adverse possession. The applicant attempted to convince the court that the course of the adverse possession had already begun in 2006, when the estate's contractor started using the road running through the real property to access the construction site. In addition, signs prohibiting unauthorised access to the site were erected and, most importantly, the gate at the end of the road was closed. When the granddaughter of Mr and Mrs Pritchard realised that the real property she had inherited was being used, she removed the signs, in response to which the estate owner launched legal action for adverse possession. After hearing the inhabitants of the neighbouring properties and after a site inspection, the court found that the estate owner had indeed used the Pritchard property, but not in an "exclusive" manner and not sufficiently to be considered to have treated it as their own. It was established that the real property was also used by, among others, local teenagers who set up a cycle park there, and by strollers who fancied an occasional walk on the property. Moreover, the mere fact of locking the gate was not sufficient to manifest to the world that the developer had the intention to use the property exclusively and to treat it as their own, as they had not even bothered to fence it.
In Poland, recent rulings on adverse possession were mainly based on cases involving power companies seeking to establish the adverse possession of real property under utility poles. However, we have also seen some very interesting cases involving adverse possession of a co-ownership interest by one of the co-owners or adverse possession of a residential property by a family that had received an eviction order. Apart from proving sufficient time of possession, the most important thing is to prove before the court that one uses the property in the capacity of an owner. And that means the entire property, not just a part of it. This possession means something more than mere use. It must have "corpus", i.e. it needs to be physical, visible, manifested to the outside world by, for example, fencing the property, repairing the house, paying taxes, granting dependent possession (e.g. renting). However, such possession must also be characterised by "animus" – the possessor's intention to own the property.
In many countries, the possession of a property for as little as 5 years (e.g. in the U.S.), 10 years (Sweden, in good faith) or 12-15 years (Australia) is sufficient to claim adverse possession. Despite some differences, in Poland, Germany, France and Spain, these time limits are 20 years for possessors in good faith and 30 years for possessors in bad faith. It may seem like a long time, but this period may pass relatively quickly. If we tolerate the use of our property by third parties, before we know it, someone may claim our property or obtain an easement.