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.