Primary and possessory title applications in NSW: the non-technical explanation

By Maurice Doria and Lada Notova

Primary and possessory title applications are complex, and success is rare but possible. Our Property & Projects team recently worked on a successful registration of ownership for a client on the basis of adverse possession, and we have prepared this article as a shorthand summary of what's involved in these applications and the important considerations to address.

A primary application and possessory title: what’s involved?

Ownership of NSW land by someone other than the owner can be claimed via a possessory title application (for Torrens Title land) or a primary application (for Old System land). These are highly technical and complex applications.

Land in NSW

Most land in NSW is held under Torrens Title. Torrens Title is a framework for land ownership under which title to land is secured by a State assurance. The Registrar General is responsible for administration of the Register which records land ownership. Registration confers indefeasible title to the subject land to the exclusion of others, subject only to interests recorded in the Register.

A small, and diminishing, amount of land in NSW is held under the Old System. Title to land held under the Old System is not secured by a State assurance. Any purchaser of land held under the Old System must conduct searches to ensure the seller holds a valid title, and to identify any other reservations or interests that might affect the land.

An owner of land under Torrens Title or the Old System holds title to the exclusion of others and is entitled to exclusive use, and occupation, of the land.

What is possessory title?

Possessory title is ownership of Torrens Title land that results from adverse possession of the land continuously for a period of not less than 12 years. In general terms, adverse possession involves dominion over the land to the exclusion of others and its use in a manner consistent with what one would ordinarily expect of a landowner.

The process of seeking a possessory title involves lodging an application (including supporting documentation) with the Registrar General (through Land Registry Services). The supporting documentation must show that the applicant has been in possession of the land for not less than 12 years, to the exclusion of others.

For land under an Old System Title, the possessory title concept applies in a similar way. However, the land must be brought under Torrens Title first, and this is done via a primary application that is lodged with the Registrar General (through Land Registry Services). For a claim against the Crown, the minimum occupation period is 30 years, and for any other person, 12 years (like a possessory title situation involving Torrens Title land).

For both a primary application and a possessory title application, the matters to be addressed in the applications are similar. A successful application must address, or incorporate, the following matters.

Overriding criteria

The overriding criteria is use, and occupation, of the land that is open (ie not secret), peaceful (ie not by force) and adverse to the actual owner (ie not by any means consented to by an owner).

The use, and occupation, must be continuous for no less than 12 years for claims against persons (other than the Crown), and no less than 30 years for claims against the Crown. It is critical that during this period there is an unbroken chain of use, and occupation, to the exclusion of all others.

Identify the owner

The identity of the owner must be established. The owner’s identity is ascertained by appropriate searches and will include searches of title registers, probate registers, death registers and the like. The extent of searches is dependent on the circumstances.

Identify the land

The land to which the application relates must be identifiable as a lot in a plan because a successful application culminates in ownership of Torrens Title land. The circumstances will determine whether deposited plans must be prepared (and registered as part of the process) to identify the land to which the application relates as a lot in a plan.

Evidence of use and occupation

Evidence of continuous use, and occupation, to the exclusion of others must be gathered and documented via statutory declarations from both the applicant and third parties.

The evidence must demonstrate use, and occupation, of the land as though the applicant was the owner. Ideally, the evidence will lay out what the applicant has done during the period of use, and occupation, of the land that is consistent with what is ordinarily expected of a landowner. This includes activities like:

• carrying out repairs;
• maintaining insurance;
• improving the land by lawfully erecting improvements or undertaking alternations and additions to improvements; and
• paying rates and taxes.

For anything that involves expenditure, evidence in the form of invoices and payment remittals is particularly helpful and powerful.

Corroboration of use and occupation

Corroboration of the applicant’s use and occupation by third parties is required. Normally, this is provided via declarations from third parties who may be neighbours, service providers, tradespersons, and the like. Applications with significant amounts of corroborative evidence enjoy better success prospects.

Adjoining landowner support

The corroboration from third parties must include owners or occupiers (or both) of adjoining land. The support from adjoining landowners should include statements that they:

• support the application; and
• do not have a claim over, or interest in, the land to which the claim relates.

Council, rates and taxes

The corroboration from third parties must include the local council. The local council must provide a statement that it is unaware of anything that would prevent application approval.

There must be no outstanding rates and taxes in respect of the land. This requires enquiries to be made of the local council and any other governmental agency that might levy rates or taxes of any kind. If there are outstanding rates and taxes, they must be paid. Ideally, the applicant should pay these, because it is conduct of a kind normally expected of a landowner.

Valuation

A successful application culminates in ownership vesting in the applicant. Essentially, there is a transfer of ownership to the applicant.

The transfer of an interest in NSW land usually attracts NSW duty. Normally, NSW duty is determined according to the greater of land value or price paid. Because the circumstances do not involve a traditional sale, land value must be ascertained by valuation prepared by an expert valuer.

The application must include evidence of having paid NSW duty that would apply if a traditional transfer had occurred. The valuation will inform the NSW duty calculation. Assessment and payment of NSW duty is arranged through Revenue NSW.

Application forms and initial assessment

Land Registry Services have prescribed forms for both a possessory title application (for Torrens Title land) and a primary application (for Old System land).

The prescribed forms must be populated. The application to be lodged will comprise the prescribed forms (duly populated and signed) together with the supporting documentation covering the above matters.

Land Registry Services will conduct a preliminary review to assess whether the application is genuine and has merit. If so, the application will proceed to more detailed assessment and public notification of the application is required.

Public notification

Public notification involves publication in newspapers (or like media) for a period of not less than one month before the application is granted. Upon expiry of the one-month period, evidence of public notification must be submitted to Land Registry Services.

Any objection to the application resulting from public notification must be resolved for a successful application.

Successful application

A successful application will culminate in the Register showing the applicant as the freehold owner of the land held under Torrens Title.