Finders Keepers - Squatters Rights

The introduction of the Torrens land title system throughout Australia at the end of the 19th century was meant to provide certainty of ownership of land, a concept know as indefeasible title. Once registered as an owner of land and with very few exceptions, title was guaranteed by the Government. Persons losing title to their land through no fault of their own, could access a compensation scheme.

However there is a little known exception to the indefeasibility rule, a concept known as adverse possession or squatters’ rights. This allows someone to take legal ownership of land if they have maintained physical control, in whole or in part, while demonstrating an intention to possess the land to the exclusion of others, even the rightful owners.

The recent case of McFarland v Gertos illustrates this. A Mr Downie, the owner of a property situated in Ashbury, died in 1947 without leaving a will and with no representative appointed to administer his estate. At the time of his death, a Mrs Grimes occupied the property as a tenant. She continued to do so until her death in 1998.

Later that year, an enterprising accountant named Gertos was visiting clients in the area and noticed the property was vacant and in considerable disrepair. He believed squatters were living in the “dark and smelly” building, which had broken windows, a “fouled” bathroom, a leaking roof, rubbish in the rooms and no electricity.

Mr Gertos took possession of the property. He changed the locks, hired a builder to undertake substantial renovations before leasing it out. 19 years later, Mr Gertos applied to be recorded as the legal owner of the property through a claim of adverse possession.

Despite that application being contested by Mr Downie’s surviving relatives, the Supreme Court found Mr Gertos’ act of taking on the role of landlord showcased his intention to possess the property to the exclusion of the rightful owners and confirmed him as the legal owner. The property was worth approximately $1.6 million.

Adverse possession cases for the whole of a property are not common. The most analogous example of ‘adverse possession’ arises between neighbours where a fence line has been built in the wrong place, has incorrectly enclosed an easement or where a survey outlining the boundaries of the property has been misunderstood.

Let’s say your neighbour’s fence line encroaches 1 metre over the boundary of your land and they have built something or planted trees on the encroaching area. In certain circumstances, the neighbour may be able to claim a permanent right to use the extra metre by way of an easement and in very rare cases, by acquiring title.

If you would like further information, please contact:

Ron Zucker 0410 590 111

Steve Williams 0404 821 464

Vincent Tripodina 0408 228 10

Chelsea Woodward 0404 065 899

Anna Polhill 0431 174 352