Estoppel land ownership dispute over leasehold property

[helpmenot]

I seem to be involved in a neighbour dispute and will try to stick to key info only. All advice appreciated.
Me and my husband jointly purchased a freehold property in 2016
We agreed a sale of the freehold in 2020
Our then buyer noticed that our physical boundaries did not match the Land Registry general red outline boundary
Through reasons i dont believe are of any use at this point, our neighbours instructed a solcitor after we fenced of the land contained within our title plan, on behalf of our then buyer.
Neighbours solicitor claimed that the previous owner (Mr X)agreed to the boundary line, and we were bound by thier interest as they were in 'actual occupation' of the land on the day of our purchase.
Thier possession took place sometime between 2013-2016
Our then buyers have now withdrawn, so our sale and purchase has collapsed.

I've recently learned that (Mr X) had a home reversion plan (equity release) making him a tennant from 2009 until our purchase.
Mr X Lease Terms and Conditions provide "you must not, sell the whole or any part of the Property, hold the Property on trust for any other person or enter into any agreement to do so without our written consent"
My understanding of Interests of those in actual occupation is that it does not create interests, only protect existing ones.
Could Mr X have the authority to grant them a legal 'interest' as a leaseholder, not a freeholder?

Any/all info adnd advice appreciated.

[rentreviewspecialist]

According tom the Land Registry, property boundaries are shown only in a general way on the Title Plan. To determine their positions and ownership more precisely it is necessary to look at each of the Land Registry documents for every bordering property, and to determine what these documents collectively say.

Were it not for the fact that you bought the property just 4 -5 years before wanting to sell, you could have claimed entitlement to ownership under `possessory title'. Whether the neighbour has been in occupation of the land for at least 12 years would entitle them to claim successfully, under `possessory title', unless evidence proves otherwise.

I wouldn't have thought the conditions of Mr X's home reversion plan anything to do with you. In any event, for Mr X to have had the plan since 2009 could or would imply that he would have owned the property beforehand and did agree the boundary with your neighbour. Why would the neighbour lie about it?

When you bought the property in 2016 did your solicitor not spot the point?

Important: Reliance on Content
I am not a lawyer and not qualified to provide legal advice. The information I provide is not intended to be legal advice and is for educational purposes only. Do not use this information to disregard any legal advice, or to delay seeking legal advice or representation because of something you have read or seen of mine on this forum. Any reliance upon the information given on this forum is at the user's own risk. I, Michael Lever, also known as rentreviewspecialist, exclude to the fullest extent lawfully permitted all liability for loss or damage, whether direct, indirect or consequential arising from your accessing, failing to access or reliance on information contained in my responses, contributions and information to and on this forum and website, from delay or the failure to respond to an enquiry, or from any information or omission contained in the information, etc.

[Lawcruncher]

Please clarify the history.

What was the position when you bought?

What have you done since you bought?

Was the boundary agreement disclosed when you bought?

If the boundary agreement is in writing have you seen it?

[helpmenot]

Thanks for the replies.

We bought in 2015 from "a finance consortium, who took over from a firm who repossessed the property."
We weren't able to raise any general or specific enquiries for this reason.
No boundary agreement was disclosed.
The neighbours have told me verbaly that they have no paperwork regarding the land ownership.

We've had a Land survey who confirms out ownership of the land in question.

It may also be relevant that the land in question has an approximate width of 4m and a length of 13m.
i.e. our pyhsical boundary is 4m closer to our house that the legal boundary on title plan and surveys plan, and runs the entire length of the property.

[Lawcruncher]

So the boundary fence was in the wrong place when you bought and you moved it when the buyer spotted it?

Whatever Mr X's status he never granted a legal interest because there was nothing done in writing. There does not look like there is a case for estoppel. The neighbour has not been in possession long enough to apply to be registered on the basis of adverse possession. You are not bound simply because he was in occupation on the day you bought.

[helpmenot]

Lawcruncher:
Yes we moved the fence once it was discovered.

Thank you for the explanation about estoppel.
I will go about locating a copy of the lease and the T&C to evidence this as despite me bringing this to the neighbours attention they persist in maintaining they own the land.

[rentreviewspecialist]

In short, you erected a fence based upon your perception of the boundary per the Land Registry title plan - even though the Land Registry states that boundaries shown on title plans are not accurate.

Your neighbour, who claims ownership of the land, is annoyed. On the balance of probabilities, very possibly they do.

As apparently you didn't query the boundary after you completed purchase of the property and only doing so now because your buyer raised the point, has it occurred to you that the buyer might've been after something?

[islandgirl]

yes, the avoidance of a boundary dispute....The OP does say they have had a survey done to confirm the line.

[Lawcruncher]

In short, you erected a fence based upon your perception of the boundary per the Land Registry title plan - even though the Land Registry states that boundaries shown on title plans are not accurate.

Your neighbour, who claims ownership of the land, is annoyed. On the balance of probabilities, very possibly they do.

As apparently you didn't query the boundary after you completed purchase of the property and only doing so now because your buyer raised the point, has it occurred to you that the buyer might've been after something?

It is not quite the case that the Land Registry says that the boundaries shown on title plans are inaccurate, but that (unless the register provides to the contrary) they show the general boundaries only but without saying they are accurate within a certain tolerance. In some contexts the application of the rule can be quite wide, In the average residential context you are not going to be able to establish the position of a boundary with accuracy, not least because of the limitations of the Ordnance Survey Plan and the width a red line on a title plan represents on the ground.

From the information supplied, the balance of probabilities is in favour of helpmenot.

Mr X was at the relevant date a tenant which means there is no way he could, even by estoppel, have given the neighbours a freehold interest. Since Mr X gave the neighbours permission to be on the land they could not have been in adverse possession. It is arguable they have been in adverse possession since 2016, but that is not long enough to apply for the land to be registered in their names. Even if they have been in adverse possession from 2013 it is not long enough. It is difficult to see on what basis the neighbours can claim the land.

Most buyers of a house with a garden assume that the boundary features match the legal boundaries. When there is a dispute over a foot or two the rule of thumb that "what you see is what you get" otherwise expressed as "the boundary features between residential properties are almost always in the right place" comes into play. This case is an exception to the rule (which I emphasise is a rule of thumb only). The land in question is four metres wide which is well outside the general boundaries rule and the neighbours have agreed that there has been a change.

Bearing in mind that (a) helpmenot was until recently happy with the boundaries as they were when she and her husband bought (b) it will be difficult to sell the property with an ongoing dispute and (c) a boundary dispute can run up a legal bill in the thousands, a pragmatic solution is to offer to sell the land to the neighbour for a price the neighbour is willing to pay. Once the land has gone to the neighbours and the fence moved again, the boundary features will match the title plan and the problem disappears.

[helpmenot]

It is probably relevant at this stage to mention when I initially approached the neighbour about fencing the land, (for our buyer) they agreed to us doing so on several occasions verbally and via message. It was only after they spoke to a solicitor that they claimed the land was theirs.
before engaging with said solicitor I offered to ‘amend our title plan’ to which they declined and said to contact their solicitor.
We’ve also offered nearly twice the ‘detriment’ they claim to have suffered as part of the estoppel, to which they did not respond.

They don’t want the land, they don’t want thier ‘loss’ can’t imagine what else I can offer except my first born.

Appreciate if someone could say if I’ve found the right legislation for our argument.

Overriding interests must be proprietary in nature, because:
(1) the interest which is postponed to a registered disposition of a registered estate under section 29(1) is “any interest affecting the estate”;
(2) by section 132(1) “legal estate” has the same meaning as in the Law of Property Act 1925, and a “registered estate” means “a legal estate the title to which is entered in the register, other than a registered charge”;
(3) the effect of the Law of Property Act 1925, section 1 is that the only estates which can exist at law are an estate in fee simple and a term of years absolute and a limited range of other interests including a charge by way of legal mortgage;
(4) by section 132(3)(b) references to an interest affecting an estate or charge are to an adverse right affecting the title to the estate or charge;
(5) the effect of sections 23 and 24 is that only someone with owner’s powers, i.e. the registered proprietor or a person entitled to be registered as proprietor, can make a disposition. Consequently, the combined effect of sections 116 and 132 is that section 116 rights require a proprietary element to have any effect.

[Lawcruncher]

My analysis of the legal position follows. Other analyses are possible.

When Mr X entered into an arrangement with the neighbours to let them occupy part of the garden ("the garden strip") there were two legal estates in your property: the freehold interest owned by the freeholder and the leasehold interest owned by Mr X. When the neighbours went into occupation they were not in adverse possession against the freeholder because the freeholder was not entitled to possession. They were not in adverse possession against Mr X because, whatever the arrangement, they were in occupation with Mr X's permission.

Proprietary estoppel is a bit of a slippery customer, However, I think it can safely be said that for it to arise some sort of promise must be made and the promise relied onto to the detriment by the person to whom the promise is made. A clear case would be if A says to B you can have my plot of land in Willow Close and I'll convey it you when you've built a house on it. If B builds the house it would be inequitable for A to claim possession of the land. The detriment must be substantial. If all the neighbours have done is use the land to extend their garden the detriment is not substantial. Anyway, proprietary estoppel is a bit of a red herring here because whatever interest (if any) Mr X gave to the neighbours it could not be greater than his own interest and necessarily had to come to an end when Mr X's tenancy came to an end.

If all Mr X gave the neighbour was a licence to use the garden it would have been determinable by notice. On Mr X's tenancy coming to an end there were two possibilities.

The first is that the licence continued. If it did it can be terminated. Your action has effectively terminated the licence.

The second is that the licence lapsed. If it did then the neighbours were in adverse possession. You were entitled to oust them and since the period of adverse possession was not sufficiently long they cannot apply to be registered as proprietors of the land.

It can be difficult to know what to do if a neighbour makes a claim but neither pursues it nor withdraws it. You have to disclose the dispute and few people will want to buy into a dispute even if the legal arguments in favour of the seller look watertight. There are several things you can do:

· Put the property back on the market and hope that you can find a buyer happy to proceed.
· Threaten to sue the neighbours for slander of title if they do not formally withdraw their claim to the land.
· Postpone the sale for a while so that when you come to sell you can say the claim has not been pursued.
· Apply to the court for a declaration that you own the land free from any interest of the neighbour; that has to be a last resort because of the expense.

[rentreviewspecialist]

In the lengthy process of re-doing my law library I came across something yesterday that might be useful.

Deuteronomy 27:17 ""Cursed is anyone who moves their neighbor's boundary stone." Then all the people shall say, "Amen!"

"All disputes between neighbours arouse deep passions and entrenched positions are taken as the parties stand upon their rights seemingly blissfully unaware or unconcerned that they are committing themselves to unremitting litigation which will leave them bruised by the experience and very much the poorer, win or lose. It depresses me that solicitors cannot at the very first interview persuade their clients to put their faith in the hands of an experienced mediator, a dispassionate third party, to guide them to a fair and sensible compromise of an unseemly battle which will otherwise blight their lives for months and months to come"


1) Can either party produce evidence that he or she is the true legal owner of the disputed land? That might be by deeds, transfers and plans backed up by features on the ground, presumptions or extrinsic evidence. If so, he or she is presumed to be in possession (Powell v McFarlane (1977) 38 P&CR 452 at 470). If not, who was in possession of the land immediately before the dispute arose?

2). Has that owner lost his legal right to the land or at least the right to possess it? Usually by adverse possession, either under the law or under the procedures introduced by Land Registration Act 2002, or by estoppel usually arising out of a boundary agreement.

[Lawcruncher]

Judges warning against getting involved in litigation over boundary disputes can unfortunately encourage encroachment.

What is needed is a compulsory system of adjudication with fixed costs pitched at a low level.

[rentreviewspecialist]

The snag with questions on a general forum is that conclusions can be drawn without knowing the full facts.

The op has stated the effective years, but not the precise dates. It is being assumed that Mr X could not give permission to the neighbour because he (Mr X) was a tenant in 2009, but without knowing when in 2009. He might've given the permission when he was the freeholder before he subsequently became a life tenant (equity release).

Also the neighbour's solicitor (ie the neighbour via his solicitor) is claiming that Mr X agreed to the boundary line when the neighbour bought the property from Mr X so presumably the point arose between the neighbour and Mr X at that time.

It has become an issue now because the op has fenced off the land (and only as a consequence of the op's buyer noticing the discrepancy on the title plan), and is claiming ownership. As that buyer has withdrawn I should've thought that the simple and least costly solution would be to withdraw the claim, remove the fence and agree in writing with the neighbour that the land is inside the neighbour's boundary and get the land registry plan amended.

[helpmenot]

Rent review specialist - thank you for your advice.
Mr X was a leaseholder from April 2009 - April 2015
Google earth pro images show their possession took please after Jan 2013.

There was no purchase of land, the neighbours communications claim the land was gifted.

We had sent them a direct message (before involving solicitors) to appeal an amicable resolution. We offered to amend our title plan. They declined
we offer them a financial settlement (nearly twice the claimed detriment) to which they initially ‘agreed in principle’ subject to agreeing the future line.
I provided a copy of our surveyors report and they have not responded to any correspondence since, it’s been nearly a month.