Bermudian landowners must be careful that they do not unwittingly give away their land for nothing.

A leading decision in the United Kingdom giving legal title to squatters resulted in a property owner losing land worth millions of pounds. Similar laws exist in Bermuda, and so the danger of losing land is also present.

Mrs. Graham, a farmer's wife, inherited some prime Berkshire development land in the UK after her husband obtained ownership of the land for free by a process known as "adverse possession".

Mr. Pye (through his company JA Pye (Oxford) Ltd) was the owner of what was agricultural land but he knew the land would be worth millions, with planning permission, as development land. The time for development was not yet ripe and so rather than leave the land to go back to nature Mr. Pye, by way of a written agreement, allowed farmer Graham to mow the land and to graze cattle, sheep and horses.

The agreement was for 11 months starting on 1 February 1983 and farmer Graham paid Mr. Pye about $3,800 in rent. The agreement said that there would be no continuation at the end of the 11 months, unless by a new written agreement.

After 11 months, farmer Graham requested a new agreement but Mr. Pye did not respond to any correspondence. He intended to make a planning application, and thought it would be best if he had possession of the land before doing so. Mr. Pye also thought that allowing grazing on the land would damage his planning application but he did not tell farmer Graham this. Having heard nothing from Mr. Pye, farmer Graham continued to use the land, to the exclusion of all others. Mr. Pye did not visit the land. By 1985 farmer Graham gave up trying to contact Mr. Pye and the land was effectively used as an integral part of his adjoining farm. Farmer Graham mowed, grazed his animals, cut the hedges and weeded the land for years. In 1997 farmer Graham realised he had adverse possession of the land otherwise known as "squatter's title".

Squatter's title in the UK arises under The Limitation Act 1980, which says, "No action shall be brought to… recover any land after the expiration of 12 years from the date on which the right … accrued …".

There are arguably good social reasons to have squatter's title rights when the land mass is limited. On crowded islands such as the UK and Bermuda there is less chance of land going to waste, with others being ready, willing and able to use and improve the land, in the knowledge that, one day, title to the land could be their own.

Unfortunately in 1998 farmer Graham was killed in a shooting accident and Mr. Pye then sought to assert his ownership rights over the land. Mrs. Graham, now a widow, defended the squatter's title she had inherited from her husband. The issue went all the way through the UK court system to the House of Lords.

Some courts found for Mrs. Graham, on the basis of the squatter's title and other courts for Mr. Pye, because it was unfair he should lose such valuable development land without compensation. The House of Lords found in Mrs. Graham's favour on the basis that:

¦ farmer Graham had been in physical possession of the land to the exclusion of all others,

¦ farmer Graham openly used the land as his own, and

¦ Mr. Pye had not visited the land in more than 12 years or indeed shown any interest in it during that period.

Since 1997 the law in the UK has changed and farmer Graham would probably not get squatter's title in similar circumstances today, but in Bermuda there might well be a successful claim for squatter's title.

In Bermuda The Limitation Act 1984 applies and with respect to land, "No action shall be brought by any person to recover any land after the expiration of 20 years from the date on which the right accrued…".

In Bermuda farmer Graham would have had to wait for 20 years rather than 12, as in the UK, before having a successful claim for squatter's title. There is one exception to the 20-year rule in Bermuda, as squatters on land of the Crown need to occupy for 60 undisputed years, rather than 20 before getting squatter's title. In addition to the squatter's title rule there are other similar rules to establish rights over land and over time. For example rights of way, rights to ancient lights and rights of drainage etc.

If you own land make sure that if you let others use it there are clear written arrangements. Also make sure that when written arrangements come to an end, the land is either vacated or new written arrangements are entered into. Additionally regularly inspect your land to make sure that no one is encroaching or using your land for any purpose. If there is encroachment, the encroacher should be asked to desist at once and if he does not then legal advice should be obtained, as soon as possible.

Alternatively, if you are a squatter and want to establish your title, you should get advice to ensure that you are doing so in a manner that will lead to a successful claim and your stewardship of the land will be rewarded.

Attorney Neil Molyneux is a member of the Property Practice Group of Appleby.

A copy of this column is available on the firm's web site at www.applebyglobal.com. This column should not be used as a substitute for professional legal advice. Before proceeding with any matters discussed here, persons are advised to consult with a lawyer.