Property laws seem pretty fixed, but even laws relating to occupancy have loose ends. This is no more true than with squatting laws, which can allow someone to take unlawful possession of a property and then claim ownership some time after – all without having paid a cent.

Yesterday, it was revealed that a property developer who took possession of an abandoned house in Sydney in 1998 successfully got awarded the title to the property – which is now worth approximately $1.6 million. Although he has to pay stamp duty for the property, he doesn’t have to buy the property itself nor go through any complex conveyancing process. This was all despite the relatives of the last registered owner contesting it in the Supreme Court.

So what are squatting laws? And how do they allow someone to claim possession of a property they never paid for? We’ll find out below.

Why do squatting laws exist?

In New South Wales, the law of ‘adverse possession’ (also known as squatting laws) is provided for in the Limitations Act 1969 (NSW). It serves as a way to discourage and rectify errors in land titles, that is, if someone does not occupy or use the property they have title to, another person who has occupied it can make a claim after 12 years. The general principle behind this law has been in existence for centuries, and different versions of it exist in most jurisdictions worldwide. Although squatting laws differ according to each State, the general rule is that someone can make a claim to a property if they have resided in it for long enough. In New South Wales, the required time period is 12 years.

But what about the owner?

For a claim to be successful, the owner of the property has to have made no effort to occupy, or exercised their right to the property in any way for 12 years. In this case, the registered owner of the property died in 1947 and didn’t leave a will. Probate laws in Australia generally hold that property which is an asset of someone who has died without leaving a valid will passes on to the immediate relatives, with spouses, parents and children being first in succession. Knowing this, it seems likely that the family of the owner simply weren’t aware that the tenant who lived in the property after the owner’s death died in 1998 – leaving it vacant.

But isn’t squatting illegal?

Yes, but not in all jurisdictions. It’s also not a criminal offence in some States, but only punishable under the tort of trespass. The Inclosed Lands Protection Act 1901 (NSW) states that it is an offence to “enter into inclosed lands without the consent of the owner, occupier or person apparently in charge” and to remain in a property after the owner has requested that someone leave. Although this seems like a direct contradiction to the principle of adverse possession, it can be argued that consent can’t be given if the owner of the property abandoned it. In addition, these offences normally require that the squatter take particular actions to enter the property, such as breaking a door or window. If a property is left open and someone takes possession, it’s not technically illegal.

Does this encourage lawlessness?

The reignited debate surrounding squatting laws feed into a deeper issue of the ethics these laws promote. It has been argued that this is especially pertinent considering the high number of properties in Australia owned by foreign investors. If no one occupies or enforces their ownership of them, how many could be possessed? Further, does entering a property on morally ambiguous (if not unethical) terms and being entitled to ownership 12 years down the track encourage a disrespect for privacy, property and the law itself?

There may be instances where squatting laws are used for questionable outcomes, and they are antiquated, but the wider aim of having an accurate land title system cannot be ignored. A potential counter to this is the fact that the majority (if not all) of property titles are now available electronically – which may mean that the need for this law has become redundant.

Have more questions? Contact a LawPath consultant on 1800 529 728 to learn more about customising legal documents and obtaining a fixed-fee quote from Australia’s largest legal marketplace.

 

 

Jackie Olling

Jackie is the Content Manager at LawPath and manages the content team. She has a Law/Arts (Politics) degree from Macquarie University and has worked in the legal industry since 2014. She's interested in legal tech and the opportunities it offers to not only the legal industry, but all people.