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Hong Kong Property Ownership: The Doctrine of Adverse Possession
After years of an occupier possessing the land of another, the true owner may try and claim its possession to use and enjoy the land. But is that possible? An occupier may indeed be entitled to its possession, which may raise the question of how? The answer is – the doctrine of adverse possession, also known as “squatter’s rights”.
Adverse Possession
Adverse possession refers to one possessing land owned by someone else but may rightfully hold a valid title to it if requirements such as, the period they have been possessing the land is fulfilled pursuant to the Limitation Ordinance (Cap. 347). It also means that the title of the true owner is extinguished against the one possessing the land (also known as, a squatter). Although, the rights of the government under the government lease or any third party’s rights that bind the land by way of easement or covenant may not be extinguished against the squatter. Adverse possession is similar in some aspects to homesteading. Like the squatter, the homesteader can acquire ownership of land by using the land and meeting other conditions. In homesteading possessing the ground is not adverse; the land is in fact ownerless.
Time Period
A squatter is to satisfy the period required to adversely possess the land based on the provisions of the Limitation Ordinance.
· s 7(1) – No action can be brought by the government after the expiration of 60 years from the date the right of action accrued;
· s 7(2) – No action can be brought by another person after 12 years from the date the right of action accrued;
· s 7(2) – No action can be brought after 20 years from the date the right of action accrued prior to 1st July 1991
Conditions
To establish adverse possession, two conditions namely, factual possession and the intention to possess not to dispossess need to be fulfilled from the time when the squatter has occupied the land as per section 13(1) of the Limitation Ordinance.
1. Factual Possession needs be shown by the squatter through a reasonable degree of physical control, which may be done by demonstrating that he/she has possession like an owner. It also must be open and notorious, so the real owner has the chance to interrupt the adverse possession within the shown time period.
2. Intention to possess not to dispossess needs to be fulfilled by the squatter by intending to exclude others including, the true owner of the land.
Other factors to consider are, the possession of the land must indeed be adverse:
· A squatter must not have license or permission of the owner, unless it was rejected, and the squatter continued to occupy the land;
· There should not be a sales agreement whereby the squatter has taken lawful title;
· In the instance that a mortgagor fails to repay their mortgage of the land, they cannot claim to be in adverse possession of the land against the bank;
· Under a valid lease, a sub-tenant is in possession of land thus, adverse possession cannot be claimed even if a tenant intrudes their landlord’s neighboring land because it will be subject to the lease’s terms.
Possessory Title
If the above two conditions proving the possession is adverse are satisfied by the squatter, the Court will assert that the squatter has acquired possessory title over the land as against the true owner of the land. Considering the rights of the true owners, they will still be registered but will neither be able to recover their possession over the land nor, enjoy or use the land. Although, the squatter does not need to register itself as the owner after acquiring possessory title over the land, the squatter will be subject to any existing mortgage and will be bound by any covenants and easements on the land.
Conclusion
The above factors and considerations discuss how a squatter can retain its possession over the land and how it excludes the original owner from using and enjoying the land that is registered under their name. There are more complex issues in relation to adverse possession such as, new territories land, land held on trust, constellations of co-ownership and even the use of certain evidence to prove the occupation of land.
If you have any enquiries about your property and land, feel free to contact us at contact-us@rs-lawyers.com.hk.
This article is co-authored by Stefan Schmierer, Vanisha Babani and Philipp Beckmann .
Whilst every effort has been made to ensure the accuracy of this article it is general in nature and does not constitute legal advice of any kind. You should seek your own personal legal advice before taking legal action. We accept no liability whatsoever for loss arising out of the use or misuse of this article.