Adverse possession

The law on adverse possession differs depending on whether the land is registered and when the period of adverse possession was completed. There is one regime for unregistered land and registered land where the period of adverse possession was completed before 13 October 2003, and another for registered land under the Land Registration Act 2002 (LRA 2002).

Before 13 October 2003, under section 15 of the Limitation Act 1980 (LA 1980) a squatter could obtain title to either registered or unregistered land if they could demonstrate 12 years' uninterrupted factual possession and an intention to possess the land. After the expiry of that period, LA 1980 prevented the 'paper' owner from recovering possession as:

  1. the 'paper' title to unregistered land was extinguished, and

  2. the 'paper' title to registered land was held on a statutory trust so the owner was obliged to transfer legal title on request to the squatter

If the title to the land is already registered, the claimant steps into the shoes of the registered proprietor and inherits the existing class of title.

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Insolvency, declarations of trust, loan agreements, artificial asset protection, sham transactions, transactions defrauding creditors, interspousal asset transfers, change of position defence and wife’s entitlement to share of husband’s assets (Sayers v Dixon)

Restructuring & Insolvency analysis: The court held that six declarations of trust (DoTs) executed by the transferor (Mr Dixon) in favour of his wife (Mrs Dixon) constituted transactions defrauding his creditors within the meaning of section 423 of the Insolvency Act 1986 (IA 1986) and that two of them, purporting to transfer all his future assets and income to Mrs Dixon, along with an accompanying loan agreement, were shams which were void and ineffective. It set aside the DoTs and ordered Mrs Dixon to restore the value of three transferred properties (which had been converted into £551,589 cash) to Mr Dixon’s trustees in bankruptcy (trustees) together with interest of £101,726. It also ordered an account to be taken of the funds that had been transferred to Mrs Dixon or on her behalf by Mr Dixon over the seven years between the date of the DoTs and his bankruptcy. The court dismissed Mrs Dixon’s defence of change of position to the trustees’ claim for restoration, finding that even if such a defence were generally available (which is unclear), she had not acted in good faith and could not rely on it. It also dismissed her defence that, having been married to Mr Dixon for many years, she was entitled to half his assets and/or an entitlement to a share of them by virtue of a right to be maintained. Written by Jonathan Lopian, barrister at New Square Chambers, who acted for the successful claimants.

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