A recent decision by the First-tier Tribunal (FTT) has shed new light on the increasingly complex Law of Encroachment, offering the property sector much-needed guidance. The case in question, Relins v Bede House Property Management Company, is being welcomed as a significant step towards greater legal clarity on this.
The ruling marks an important moment in the evolution of encroachment law, helping to unravel the legal uncertainty that has emerged since the introduction of the Land Registration Act 2022. Acting on behalf of the successful applicant, Paul Lakin of Exchange Chambers was instructed by Clare Castillo of Blacks Solicitors. Here, Clare, associate chartered legal executive in the real estate litigation team discusses how this decision helps unknot the Law of Encroachment.
In practice
Encroachment occurs when a tenant occupies land outside their legal lease boundary – commonly roof terraces, lofts, balconies, sheds, garages, or gardens.
Recent case law clarifies that tenants occupying such land for 12+ years may, in some cases, apply to HM Land Registry to be recognised as leaseholders of that space. This particular case involved a tenant (A) and her predecessors in title occupying a roof terrace immediately adjacent to, and accessible exclusively from, her first floor flat. The terrace lay beyond the demise of the flat’s lease, and formed part of the freeholder’s title. The dispute over Anita’s ownership of the terrace began when one of the five leaseholders in the property disputed A’s right to occupy the terrace.
Relins v Bede House Property Management Company decision
The freehold management company was comprised of the leaseholders of the five flats, two of whom were in dispute. The other three leaseholders were aware that the flat roof had been used as a roof terrace for many years, but they had not questioned whether A had a legal right to do so and none of them had opposed it. The case looked at the legal principles underpinning the Law of Encroachment in a leasehold context and whether or not it is a type of adverse possession (as applies largely to freehold land) or is a separate doctrine.
The Tribunal confirmed that a tenant can, under certain circumstances, claim additional land that they’ve occupied even if it wasn’t originally part of their lease. Unlike adverse possession, legal possession of land in an encroachment context doesn’t have to be ‘adverse’. The landlord may have knowledge of and tacitly accept the tenant’s possession of the land.
The tribunal held that after 12 years of such possession, the encroachment ‘bites’ and the landlord can no longer deny (or is ‘estopped’ from denying) the leaseholder’s title to the land and the occupied land becomes part of the tenant’s lease. This provides clarity on the law and what will be upheld in encroachment cases unless the landlord case shows particular reason or exceptional circumstances, of which neither applied in this case.
Key takeaways
This case and ruling represents a positive step forward towards untangling the complexities surrounding encroachment law and provides several notable takeaways, including:
- Under the legal principle of estoppel, a landlord who has knowingly allowed such occupation may be prevented from later denying the tenant’s rights. Conversely, tenants cannot deny the landlord’s continued freehold ownership.
- If a tenant successfully claims the additional land, it becomes part of their leasehold, but the landlord’s freehold interest remains. The tenant would assume responsibilities for the land in line with their existing lease.
- Landlords who become aware of encroachment, and object to the tenant’s occupation, should act before the 12-year mark to preserve their rights. However, in many cases, neither party is aware the occupied land falls outside the lease. Landlords may also mistakenly assume such land is within the tenant’s demise or have informally permitted the arrangement.
- Where long-term occupation has occurred, landlords should seek legal advice on how to either reclaim or formalise the arrangement. Likewise, tenants who believe they are occupying land outside their demise may be eligible to apply for formal leasehold recognition. Legal advice should be sought to provide clarity on rights, risks and the application process.
- To prevent unintended consequences, landlords are encouraged to conduct a ‘stock take’ of land, especially in older or sub-divided properties, to identify any unauthorised occupation.
