What is a Claim for Adverse Possession in a Commercial Lease?

A property owner may decide to let a business owner have sole possession of their commercial property under a commercial lease. The business owner (or tenant) will use the property as their business premises and pay the property owner (or landlord) an agreed rent. Under a commercial lease, the landlord consents to the tenant’s sole occupation. As a result, it is unlikely that a tenant can adversely possess the property. Nevertheless, this article will explain adverse possession in the context of a commercial lease.

What is Adverse Possession? 

Adverse possession enables ‘squatters’ or occupiers to gain certain ownership rights to the land after occupying it for a certain period of time. To claim adverse possession, the occupant must have been in sole control of the land for:

• 10 years if the land is registered; or
• 12 years if the land is unregistered. 

To be eligible, the occupant must continuously occupy the property without interruption. Additionally, the occupant must provide that it would be impossible for anyone else to possess the property without the owner’s knowledge.

However, any time before the 10 to 12-year occupancy, the landowner can still ask trespassers to leave their property. If the landowner fails to do so, the occupant can make a claim for adverse possession to the Land Registry for registered land. The landowner will have to dispute the application and prove to the land registry that they hold legal title.

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Can Commercial Tenants Claim Adverse Possession Under a Commercial Lease?

A common fear amongst commercial landlords is that their tenants may try to claim property ownership through adverse possession. Nevertheless, a tenant under a commercial lease agreement cannot usually claim ownership of the property they have sole occupancy of through adverse possession. This is because the commercial landlord or owner has consented to their sole occupation.  

However, a tenant may try to make an adverse possession claim in a commercial lease where the landlord has not submitted a property claim for longer than 12 years. They may be able to make an ownership claim where:

• the lease term has ended, and there has been no agreement for lease renewal; and 
• they have continuously been the tenant in sole possession of the commercial property over those 12 years. 

In saying that, an occupant cannot make an ownership claim if the property owner is:

• mentally unwell;
• a minor; or
• deceased.

However, as stated above, a commercial tenant cannot claim property rights through adverse possession if they occupy the premises under a commercial lease. Nevertheless, the law is specific in this area, so we suggest that you seek advice. 

Key Takeaways

Adverse possession enables ‘squatters’ or occupiers to gain certain ownership rights to the land after occupying it for a certain period of time. A commercial tenant cannot claim property rights through adverse possession if they occupy the premises under a commercial lease. This is because the commercial landlord or owner has consented to their sole occupation.  

If you need help with your commercial lease, LegalVision’s experienced leasing lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents for a low monthly fee. So call us today on 0808 196 8584 or visit our membership page.

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