With market conditions weakening, allotting finances for the acquisition of property can be tricky. However, in New South Wales it is possible to own land without actually paying for it.
The state has an existing law that permits someone to become the owner of the land they have occupied exclusively for at least 12 years through “adverse possession.”
In an article published on Swaab’s website, adverse possession or “squatters’ rights” was described as a case of “use-it or lose-it”. While this rarely happens and requires you to go through a highly technical process, a recent decision of the New South Wales Supreme Court in McFarland v Gertos [2018] NSWSC 1629 gave a preview of the consequences one has to face when land is not “used” by the owner – specifically when land has been overlooked by the relatives of a deceased property proprietor.
The property in the case is located in Ashbury and was originally owned by a Mr. Downie. When Mr. Dowie died in 1947 without leaving a will and without appointing a relative to take care of his estate, the property was rented by certain Mrs. Grimes. She stayed in the place until her death in April 1998.
After her death, the property remained vacant for a time before Mr. Gertos took possession of the property in late 1998.
Mr. Gertos recalled that he was visiting clients of his accounting practice when the property caught his attention. He said that it was vacant and “falling into disrepair.” He renovated and refurbished the house until it became liveable again.
In 2017, Mr. Gertos applied to be the proprietor of the land on the basis of “adverse possession.” The Registrar-General responded that his application would only be approved if Mr. Downie’s surviving relatives did not take the case to the Supreme Court of New South Wales. The family argued that Mr. Gertos should be restrained from registering as the proprietor of the property and that he was not entitled to be registered on the title to the Ashbury property.
Justice Darke, who was assigned to the case, considered the applicable provisions of the Real Property Act 1900 (NSW) and the Limitation Act 1969 (NSW) as well as the legal principles applicable to a claim based on adverse possession, including the well-known statement of Bowen CJ in Eq in Mulcahy v Curramore Pty Ltd [1974] 2 NSWLR 464 at 475. He then came to the decision of giving ownership of the property to Mr. Gertos.
“Mr Gertos’ possession of the land since about late 1998 can be regarded as open, not secret; peaceful, not by force; and adverse, not by consent of the true owner. It has continued without interruption to the present day. In my opinion it is possession by a person in whose favour the limitation period under the Act can run…,” he stated.
Justice Darke said he could not accept the submissions of Mr. Downie’s relatives that they were the rightful owners of the Ashbury property, stating that if a legal personal representative was now appointed for Mr Downie’s estate, that person “could bring and maintain the cause of action to recover the Ashbury property from Mr. Gertos.”
Consequently, Mr. Downies’ relatives’ application for relief was junked by the Court and they were ordered to pay Mr Gertos’ court costs.
The case demonstrated the possibility of owning property via adverse possession. It also serves as a wakeup call for those who have been neglecting their property.
