Should landlords be concerned about squatter's rights?

Published 14 Jun 2019

Squatters are legally able to claim ownership of a property if they've occupied it continuously for a number of years. However, it's not quite as simple as moving into a property and staying there. For landlords, the most important thing to negate any claim to squatter's rights is is to ensure a proper lease agreement is in place.

When do squatter's rights apply?

Squatter's rights are supported by the lawful notion of adverse possession - acquiring legal ownership without consent of the rightful owner. The courts consider the validity of squatter's rights claims around two statements:

  • There must be factual possession.
  • The 'squatter' must show intent to occupy the property.

In practice, this means squatters must demonstrate the following:

  • Continuous occupation for 12 years in NSW and Queensland, or 15 years in Victoria. 
  • Private occupation to the exclusion of others, or factual possession, for example by installing locks and being responsible for utility bills.
  • Open use of the property - i.e not residing there in secret or deliberately trying to hide occupation.

However, assuming you live somewhere as a part of a lease agreement, your rights to adverse possession are null and void. The terminology, 'adverse', means that your use of the property must be without the lawful consent of the true owner. That's why it's perhaps more likely that a derelict property that has fallen into disrepair and is seemingly forgotten about might be occupied by squatters.

In fact, this proved to the case very recently, when a Sydney man came upon an unoccupied property, renovated and rented it out before successfully claiming ownership of the house valued at around AU$1.6 million.

Squatters and land

Land owners are more likely to be affected by adverse possession outside of the property because many squatter's rights claims are actually related to land. Neighbours who encroach on someone else's land, perhaps fencing it off for their own use, or clearly using it as their own, could claim adverse possession if the rightful owner doesn't object within the relevant time period. This could apply to disputed land boundaries in residential properties, and is also sometimes used in disputes where the original owner has passed away and someone else has been using the land.

For this reason, owners should ensure they properly secure their property and have proof that they are paying all the associated expenses.

Should you have any queries or concerns about your rights as a landlord, contact the legal experts at Malouf Solicitors. We deal with many areas of residential and property law.

Please call us on 02 8833 2000 to speak with a lawyer

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Kim of Sydney

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