The operation of the doctrine of encroachment when the tenant acquires the reversion

The doctrine of encroachment means that a tenant is deemed to possess neighbouring land not included in the demise (to which his only claim is based on possession) on behalf of the landlord. The landlord is entitled to possession of it at the end of the lease. If the tenant acquires the reversion (or a new lease) there is a presumption that the sale (or lease)  includes the land encroached on. This situation also leads to an equitable presumption that the lease and the reversion are not to merge.

In Tower Hamlets LBC v Barrett ([2005] EWCA Civ 923) the Barretts were annual tenants of a pub the freehold of which was owned by the brewery. Through 12 years’ adverse possession they defeated the title of Tower Hamlets to land adjoining the pub in 1989 / 1990.  In 1993 the Barrretts bought the freehold of the pub from the brewers. One question was whether the freehold of the land encroached on belonged to the brewery or their tenants. The English Court of Appeal decided that it belonged to the tenants. The logic of the doctrine of encroachment led to a presumption that the sale to the Barretts included the freehold title of the land acquired through their adverse possession. Alternatively, it was plainly in the Barretts’ interest that the lease and freehold reversion should not merge since until they did the Barretts could retain possession of the land encroached on (presumed to form part of the lease).

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