Garages for Sale – £1 (plus costs)

Property & Land Law

09 March 2021

I dealt recently with a claim for adverse possession which arose from a fairly unusual set of circumstances. My client had purchased two lock-up garages at auction in 1985 for the sum of £2,100; the garages were part of a residential estate which had been constructed by a large-scale Developer on previously agricultural land. For reasons which were not clear, the solicitors my client instructed to register the purchase of the garages did not do so and, when my client’s files were then transferred to several further sets of solicitors at various stages in the intervening years, no one appears to have noticed that the registration had not been completed. Nevertheless, my client used the garages throughout the period for storage in connection with his building company.

In 2003 the garages, along with various other remnant plots (i.e. the bits left when the various properties on the residential estate had been constructed and sold off as individual plots from the original Title covering the entire estate), were sold for £1 by the Developer to a Company operated by their solicitor; the individual plots were of little value and it was not considered economical for the Developer to either rent or sell the plots individually. The Company registered the transfers into its name but did not undertake any inspection of the properties, although one of the directors of the Company owned and rented out a property nearby and occasionally visited or parked in the area.

In early 2017 my client planned to sell the garages as he was closing down his building business but the auctioneer dealing with the sale noticed that he did not actually own the garages! Correspondence then ensued (and rapidly became rather “bad-tempered”) between my client’s solicitors and the Company.

My client provided some limited documentation from the time of the original purchase and some neighbours confirmed he had been using the garages for as long as they had lived in the area (the late-1980’s and mid-1990’s) and when the Land Registry Surveyor later visited the garages as part of the application for registration of my client’s interest he confirmed that my client had the keys to various padlocks used to secure the garages (but noted that there were some other seized-up padlocks on the doors which did not prevent access).

The Company did not accept this evidence as sufficient and the matter went to a hearing at the Property Chamber (Land Registry Division) of the First Tier Tribunal.

My client’s solicitors had completed the ADV1 form in June 2018 (more than a year after the auctioneer had told my client he was not the owner of the garages) and made the claim for adverse possession under paragraphs 5(2) and (3) of Schedule 6 of the Land Registration Act 2002, i.e. claiming that:

5(2) …(a) it would be unconscionable because of an equity by estoppel for the registered proprietor [the Company] to seek to dispossess the applicant [my client] and
(b) the circumstances are such that the applicant ought to be registered as the proprietor.
5 (3) … the applicant is for some other reason entitled to be registered as the proprietor of the estate.

This situation was not one of the more common “boundary dispute” adverse possession cases where paragraph 5(4) of the same Schedule applies: the requirements that “(a) the land to which the application relates is adjacent to land belonging to the applicant …[and] (b) the exact line of the boundary between the two has not been determined” were not met. In addition paragraph 5(4)(c) requires that “for at least ten years of the period of adverse possession ending on the date of the application, the applicant … reasonably believed that the land to which the application relates belonged to him”.

No reference was made in the application to section 29(2)(a)(ii) of the 2002 Act or paragraph 2 of Schedule 3 to the Act which provides that certain unregistered interests can override registered dispositions so that someone (e.g. my client) in actual occupation at the time of the disposition (in this case the transfer to the Company) can potentially defeat or trump the registered title unless their “occupation would not have been obvious on a reasonably careful inspection of the land at the time of the disposition” (Schedule 3, para 2(c)(i)).

Given that there had been no contact at all between the Company and my client prior to the dispute arising there were no grounds in fact or law to claim an equity by estoppel (under para 5(2)(a) above) so this point was not pursued at the Tribunal.

The argument under paragraph 5(3) (i.e. “some other reason”) relied on my client’s evidence that he had paid the purchase price for the garages but the registration had not been completed (see Megarry & Wade “The Law of Real Property” at 7-096 and Ruoff & Roper’s “Registered Conveyancing” at 33-044) and that he had been in open and obvious occupation of the garages since the purchase of the garages in 1985. The Company accepted that they had not inspected the garages following their purchase in 2003 and, in fact, had no evidence to contradict my client’s account of his original purchase or subsequent occupation; in effect, they chose to “put him to proof” of his case.

The Tribunal accepted my client’s evidence and also confirmed that his occupation would have been obvious on a reasonably careful inspection of the garages at the time of the transfer to the Company in 2003 so that his interest overrode that of the registered proprietor . As a result, my client’s claim was successful and the Company were ordered to pay his costs of the application.

The Tribunal noted that whereas paragraph 5(4) requires the applicant (i.e. my client) to reasonably believe he owned the land for ten years ending with the date of the application (so that the year delay between finding out he was not the owner and the application to the Tribunal would have been fatal to a claim under that sub-paragraph) there was no such requirement under paragraph 5(3).

To summarise matters (and to provide the key “Take Away”s from the case):-

• Always check that the purchase of land (especially at auction) has been properly registered at the Land Registry.
• Retain key documentation, e.g. confirmation of the purchase and of payment of the purchase price and evidence of actual use of premises.
• If you have bought land or property without seeing it, make sure you inspect it (and keep a record of the inspection) to ensure it is vacant (and/or you know who is in actual occupation).
• Physically inspect your property on a regular basis and keep records of those inspections.
• If there is a dispute about ownership of land and “adverse possession” may be an issue, act swiftly to protect your position.
• If you have no evidence to contradict the other side’s account, consider whether it is really worth putting them to proof.
• Avoid unproductive bad-tempered correspondence – Remember “you catch more flies with honey than vinegar!”


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