The government has recently approved a number of the Law Commission’s recommendations to amend parts of the Land Registration Act 2002 (“the Act”). Various issues were considered as part of the Law Commission’s 53 recommended amendments, including the areas of law known as adverse possession and safeguards to help reduce registered title fraud. Two examples are summarised here:
There are two routes which an applicant could potentially consider pursuing when making an application for adverse possession of registered land. These are known as the 12 year rule and the 10 year rule, the latter having been introduced by the Act and being the more difficult of the two to succeed with, despite the requirement to establish a shorter period of adverse possession.
Let us assume for the purposes of this article the classic case of two neighbours being in dispute about the ownership of land between their respective properties. Let us also assume that an application for adverse possession based on the 10 year rule has been made. A registered owner of land who has received a neighbour’s application can a) object to the application by disputing that the applicant has been in adverse possession and/or b) they can require the applicant to prove that they can successfully rely on one of three available conditions under paragraph 5, schedule 6 to the Act. If the applicant is unable to prove one of those conditions then their application will fail.
The Law Commission recommended that the third condition should be amended. It currently reads as follows:
‘The third condition is that—
- the land to which the application relates is adjacent to land belonging to the applicant,
- the exact line of the boundary between the two has not been determined under rules under section 60,
- for at least ten years of the period of adverse possession ending on the date of the application, the applicant (or any predecessor in title) reasonably believed that the land to which the application relates belonged to him, and
- the estate to which the application relates was registered more than one year prior to the date of the application.’
Of the three available conditions, this is the most popular one relied upon by applicants.
The highlighted part of this condition has created uncertainty in recent years. It does not make clear whether the applicant’s reasonable belief has to continue up to the date that they make the application to Land Registry. A Court of Appeal decision from 2012 suggests that an applicant who wishes to rely on this condition needs to act promptly once their reasonable belief as to the position of the land has been challenged, but what does ‘promptly’ mean?
The Law Commission recommended that where an applicant relies on this condition, he or she must apply within 12 months of when his or her reasonable belief that the land belonged to him or her came to an end. The government has accepted this recommendation. Once this amendment becomes law it will provide some much needed clarity to the application of the third condition.
Registered title fraud
The Law Commission has recommended that a new statutory duty of care be introduced to help reduce the potential for registered title fraud to occur. In particular, the concern is with situations arising where people pretend to be the owner of land and succeed in selling that land to an innocent party who subsequently discovers the rightful owner was not party to the transaction. The statutory duty of care would require conveyancers and certain other professionals to take reasonable care to verify the identity of the parties on whose behalf they are acting. There are, of course, measures already in place which require certain steps to be taken when identifying a client. However, it is proposed that with this new duty, the steps required to verify a client’s identity would be provided by HM Land Registry in directions following consultation.
The government has accepted this recommendation but also suggested the new duty should go further to limit the risk that present or future transactions are fraudulent. As an example, it suggests that it should enable HM Land Registry to set out reasonable steps that individuals should take to establish their own identity where no conveyancer is involved.
The date on which the above recommendations will become law is not yet known but it is hoped that they will become law in 2022.
Read our other predictions for 2022