Did you know that by paying someone's council and water rates for 12 years or more you could get title to the land?
In New South Wales you can become the owner of land by "adverse possession".
Here is how it can happen.
6 Malleny Street, Ashbury was a 3 bedroom house on a block of land (the "House"). Malleny Street is a street with one end blocked, next to Canterbury Racecourse.
Mr Downie purchased the House in 1927. He lived in it with his family until shortly before the Second World War, when he moved out.
Mr Downie died in 1947, without leaving a will. His daughter, Mrs McFarland, survived him. On his death, the House was leased to Mrs Grimes. Mrs Grimes was a "protected tenant". She could occupy the House for life by paying a small rental. She occupied the House for another 50 years until shortly before she died on 19 April 1998.
In the second half of 1998, Mr Bill Gertos noticed that the House was unoccupied and was falling into disrepair. He made enquiries of the neighbours, then entered the House through the rear door. The door was off its hinges, and the House was open. Inside, he found rubbish, papers and scraps, an empty wardrobe, a bed, a dirty mattress and some broken chairs. The electricity was not connected, but there was running water.
Mr Gertos decided to take possession of the House. He spent about $35,000 on:
- paying the outgoings;
- waterproofing the roof;
- changing the locks;
- appointing a managing agent; and
- renting the property.
In 2014, Mr Gertos spent $108,000 repairing the House. He continued to rent the House.
In 2017, Mr Gertos made a possessory application to become the owner of the House.
Mrs McFarland, (Mr Downie's daughter), challenged Mr Gertos application.
The court accepted that Mr Gertos was in adverse possession:
The House was unoccupied when he took possession;
- had the locks changed, made the House secure and habitable;
- rented the House to a series of tenants though a managing agent from 1998 to 2017. There was evidence of a signboard on the House and internet website advertising for a tenant in 2005 - this was sufficient possession - it was not necessary for him to physically occupy the House;
- paid Council rates, Water rates and usage charges, land tax, maintenance and insurance premiums;
- spent more than $100,000 in 2014 carrying out substantial works;
- declared the income and expenses relating to the House in his income tax returns;
- disclosed his possessory title entitlement in his Family Law Proceedings in 2015;
The House was on a single title.
The court granted the application for a possessory title for Mr Gertos to take absolute ownership of 6 Malleny Street, Ashbury.
As you are taking a valuable right from someone, the process is complicated. But if you succeed you will get a "possessory title". You will become the absolute owner of the land which you may use, by occupying the land, leasing or selling it.
Often land that is subject to an application for possessory title is land which has been overlooked by executors of a deceased estate. Or is land that was owned by a person who sadly dies without anyone knowing about them and the land they owned.
A possessory title application must be for the whole lot, not a part of a lot.
To make a possessory title application, you must prove you have occupied the land "adverse" to the title of the registered owner. You cannot obtain the possessory title of land that you have leased or occupied under some arrangement from the registered owner. Any break in your adverse possession of the land will mean that the 12 year period must recommence.
Application for possessory title is made by lodging appropriate documentation with the Land Registry Services. The application requires you to provide to the Land Registry Services:
- A list of the documentary title to the date of application
- The name and address of the person or persons who may, according to the documentary title, have an interest at law in the subject land at the date of the application.
- A list of the devolution of the possessory title from the date of the claim to the time of the application. The devolution of the title is the passing of title to land by the operation of law such as by a will or by the laws of distribution out of an intestate estate
- Statutory declarations from you and as many disinterested witnesses as practicable stating that to the best of their knowledge and belief, the circumstances under which the possession of the land commenced, the manner and extent to which the land has been used and occupied, the nature of improvements upon the land, ages of fencing and improvements upon the land. Declarations should make reference to a plan which clearly identifies the land and indicates the nature of existing improvements and occupations (fences, walls etc) upon it.
- A letter from the council indicating who has been assessed for rating concerning the land being claimed and who has paid the rates during the period of possession.
- A survey of the land by a registered surveyor.
- Probate searches identifying those persons entitled to be registered proprietors of the land but for your possessory title.
If you are successful in your application, you will have to pay stamp duty on the value of the land. Stamp duty must be paid to the Office of State Revenue at the standard "property transfer rates".
Land Registry Services must send to the owners of neighbouring land notice of your application for possessory title. The notice period is 35 days. The 35 days can be reduced if you get letters from your neighbours consenting to your application.
If you find such a lot, we have experience in obtaining possessory titles. Contact Etienne Lawyers.