Squatters' rights have for a long time supported the adage that possession is nine-tenths of the law. Someone who is not the legal owner of a piece of land can become so by possessing it for a specified period, usually 12 years.

Such adverse possession can be prevented if the occupier acknowledges the "paper" owner's title in writing, if the owner grants a tenancy to the occupier or the owner physically recovers the land.

If the landowner fails to act to recover possession of the land within the specified time, the squatter can apply to be registered as the owner.

In some cases, this can lead to a financial windfall, as in the case of J A Pye (Oxford) Limited v Graham, which highlighted how valuable adverse possession rights can be.

Pye owned 23 acres of prime agricultural land with development potential in Berkshire. Graham was allowed to use it for grazing sheep, cattle and horses in 1983, according to a written agreement.

After the first agreement ended, no further written agreement was signed because Pye was advised to recover the land for possible of development.

However, Graham did not vacate and Pye took no further action until 15 years later in 1998, when possession was claimed. Graham argued that he had title through adverse possession, and won.

Pye's successful appeal was overturned by the House of Lords.

But the story didn't end there. Pye successfully argued at the European Court of Human Rights (ECHR) that the combined Land Registration Act 1925 and the Limitation Act 1980 breached his human rights under article one of the European Convention on Human Rights. This protects a person's right to the peaceful enjoyment of their possessions and to not be deprived of them except in the public interest.

Pye was deemed to be entitled to compensation, payable by the UK government - a figure of £11m has been quoted.

The indications are that the ECHR's ruling could spell the end of people obtaining title by adverse possession.

So far, the UK Land Registry has said it will continue to deal with claims under the current law, but European rulings have a way of filtering through to domestic law.

The advice for anyone who thinks they have adverse possession rights is to act now before the European court decision leads to an amendment of the law in this country.

* Simon Robinson is partner and head of commercial property at Blackett Hart and Pratt. For more information, contact him on 0191-384 0840.

Published: 17/01/2006