Have you ever seen property you particularly liked but couldn’t track down the registered proprietor to purchase it? Or have you stumbled across vacant land and set up camp on it? Perhaps planted some trees or grazed some sheep?
There is abandoned land all around us. Land becomes ‘abandoned’ when, after due inquiry, the registered proprietor or any other person with a legal right to possess the land cannot be located.
In most cases, the registered proprietor of the land will have been dead for many years. Such an example recently reported in the media is the story of abandoned land in Cardrona Valley, Central Otago. The land was purchased by gold miners and hoteliers in the late 19th century but subsequently abandoned when the stores of easily accessible gold in the area dried up and they moved to more promising areas. The land was still in the original registered proprietors' names even though they were all long dead.
This article will guide you through three ways in which an occupier may be able to acquire ownership of abandoned land:
- through making an ‘application for certificate of title based on possession’, also known as an adverse possession application;
- through the sale of ‘abandoned land’ by a local authority; and
- by Public Trust becoming the manager and selling the ‘unclaimed property’.
All of these options involve public notification. This carries the risk that the registered proprietor of the land or one of his or her descendants will come forward to claim it.
Adverse possession application
Under section 3 of the Land Transfer Amendment Act 1963, an adverse possession application can be made by an occupier of land who can show that they have had at least 20 years of ‘continuous exclusive possession’ without the registered proprietor's consent.
The application is lodged with Land Information New Zealand (‘LINZ’) and must set out the period of personal possession by the applicant, any period of prior possession by their predecessors, illustrate the manner in which the land has been occupied (for example, if it has been fenced), and list any improvements on the land made by the occupier.
The application must also include a statutory declaration by someone who knows the occupier, the land in question and its history. That person must also be able to verify that the length and manner of possession set out in the application is correct. Statutory declarations are often made by a long-term neighbour or real estate agent with expertise in the related area.
If the adverse possession application is accepted by LINZ, the Registrar of Land (‘the Registrar’) will advertise the application in the local newspaper and give notice to any person he or she believes has an estate or interest in the land.
The application will be refused (or limited) if the registered proprietor or a descendant (or any person with another interest in the land) lodges a caveat within the time limit given in the notice. A caveat prevents the Registrar from dealing with the land until the caveat is withdrawn. If a caveat is successfully lodged by, say, a descendant of the registered proprietor, the Registrar must give them time to establish their claim and register as the registered proprietor.
If no registered proprietor or descendant comes forward, the Registrar will proceed with the application. The occupier will be required to get a survey certificate and a new title will then be issued in their name. A major benefit of this option for an occupier is that they do not have to pay a purchase price for the land but there are costs associated with making the application.
Sale of ‘abandoned land’ by a local authority
Under sections 77 to 81 of the Local Government (Rating) Act 2002, a local authority has the power to sell land if rates have not been paid for at least the previous three years.
The local authority must give public notice of its intention to have the land declared abandoned and to sell or lease the land. If a descendant of the registered proprietor comes forward, they may get the land transferred into their name provided they pay the rates owing on the land.
If no one objects to the land being declared abandoned by the time the notice period expires, the local authority can apply to the District Court for an order declaring the land to be abandoned and authorising the local authority to sell or lease it.
A local authority that is authorised to sell abandoned land must first attempt to sell it by public auction or public tender. If the land does not sell, it may then be sold privately as long as the sale price is not less than the reserve. For an occupier, the downside to this process is that there is a good chance that someone else will end up with the land due to the public sale requirement (even though it may seem to the occupier that they have a better right to it).
This option is typically a quicker way to gain ownership of land than by an adverse possession application. However, there is no guarantee that an occupier will be able to get the local authority to agree to proceed with an abandoned land sale – these sales do not occur very often.
Sale of ‘unclaimed property’ by Public Trust
Section 99 of the Public Trust Act 2001 gives Public Trust the power to become manager of land if the registered proprietor is dead and after ‘due inquiry’ it is not known whether there is anyone in New Zealand with authority to deal with the land.
If the land is valued at $40,000 or less, due inquiry will involve finding evidence of the registered proprietor's death and any will they may have made. Public Trust will then advertise its intention to become manager of the land in the local newspaper and in the New Zealand Gazette. If no responses are received, Public Trust can appoint itself property manager.
If the land is valued at $40,001 or more, the process is much more extensive. A higher standard of research and advertising is required and the search for possible descendants can take up to a year or more. For land of this higher value, Public Trust must apply to the District Court to be appointed property manager.
Once it becomes property manager, Public Trust can sell the land privately. Where Public Trust sells the land to the occupier, it may reduce the sale price to take into account any improvements that the occupier has made. The proceeds of the sale are held on trust for the descendants, and if not claimed within 20 years, they go to the Crown Bank Account.
In the case of the Cardrona Valley abandoned land, Public Trust was appointed to track down the descendants of the registered proprietors. It found descendants for most of the properties, but there were a handful for which no descendants could be found and were subsequently put up for sale.
Just because you possess land for a long period of time does not mean that you automatically become the legal owner. If you suspect that some of the land you are in possession of is not legally yours or you want to acquire some land but cannot track down the registered proprietor, we recommend that you seek advice from your Lawlink lawyer regarding the appropriate course of action to take.
© Anderson Lloyd