Treatment of application
249.Paragraph 3 provides that a recipient of a notice under paragraph 2 may, by notice to the registrar, require the application to be dealt with under paragraph 5. If the recipient does this then he or she is objecting to the application.
250.Paragraph 4 provides that if there is no such requirement then the applicant must be entered in the register as the new proprietor – paragraph 9 deals with the effect of such registration (and of registrations under paragraph 7).
251.At present, where a squatter has been in adverse possession for the required period the registered proprietor holds the registered estate on trust for the squatter. When an application for registration is successful, in the case of a squatter in respect of a registered freehold, he or she is registered as proprietor of a new freehold title and the existing freehold title is closed insofar as it relates to the land squatted upon. In the case of a registered leasehold the squatter is registered as proprietor of that leasehold.
252.Under paragraphs 4 and 7, in all cases the applicant will be registered as proprietor of the existing registered estate.
253.The present provision (Land Registration Act 1925, section 75) that the registered proprietor holds on trust for a squatter is not carried forward to the Act because the circumstances where a squatter will be entitled (under paragraph 5) to be registered as proprietor are limited and such a right will be protected against third parties provided that the squatter is in actual occupation of the land in question. His or her proprietary rights will then have overriding status.
254.Paragraph 5 provides that if the applicant can show that one or more of three conditions applies, the applicant is entitled to be registered as the new proprietor of the estate. If a recipient who has objected disputes that a condition applies, then if the objection is not disposed of by agreement the matter will have to be referred to the adjudicator under the general provision as to objections.
255.The first condition set out in paragraph 5 is intended to provide statutory recognition for the equitable principles of proprietary estoppel. Examples might be:
	Where the applicant/squatter has built on the registered proprietor’s land in the mistaken belief that he or she was the owner of it and the proprietor has knowingly acquiesced in his or her mistake. The squatter eventually discovers the true facts and applies to be registered after ten years.
	Where neighbours have entered into an informal sale agreement for valuable consideration by which one agrees to sell the land to the other. The “buyer” pays the purchase price, takes possession of the land and treats it as his own. No steps are taken to perfect his or her title. There is no binding contract because the agreement does not comply with the formal requirements for such a contract. The “buyer” discovers that he or she has no title to the land. If he or she has been in possession of it for ten years he or she can apply to be registered as proprietor.
In each of these cases, an equity arises by estoppel, to which the legislation should be able to give effect by registering the squatter as owner of the registered estate in place of the existing proprietor.
256.Examples of the second condition (some other right to the land) might be:
	The squatter is entitled to the land under the will or intestacy of the deceased proprietor.
	The squatter contracted to buy the land and paid the purchase price, but the legal estate was never transferred to him or her. In a case of this kind the squatter-buyer is a beneficiary under a bare trust, and, as such, can be in adverse possession.
257.The third condition (reasonable mistake as to the boundary) would cover cases such as:
	Where the boundaries as they appear on the ground and as they are according to the register do not coincide, for example, because when the estate was laid out the dividing fences or walls were erected in the wrong place and not in accordance with the plan lodged at the Land Registry.
	Where the registered proprietor leads the squatter to believe that he or she is the owner of certain land on the boundary when in fact it belongs to the registered proprietor. If there has been detrimental reliance, then the first condition (estoppel) might also apply.
258.One of the requirements of the third condition is that estate to which the land relates was registered more than one year prior to the date of the application. This requirement is imposed because title to unregistered land can normally be acquired after twelve years’ adverse possession while under the third condition title to registered land may be acquired after ten years’ adverse possession. There might be a case where the squatter had been in adverse possession of unregistered land for more than ten but less than twelve years, the title was then registered and the other requirements of the third condition are met. The squatter would not have barred the title of the landowner prior to registration of the title but if this provision was not made he or she would be entitled to apply to be registered as proprietor as soon as the owner was registered. In other words, the owner would have no opportunity to evict the squatter.
259.Where an application does not rely upon the third condition there is no minimum period during which the estate must have been registered – all that is required is that the estate is registered when the application is made (paragraph 1(4)).