Adverse possession: what if the landowner purports to grant a licence to the squatter?

It may be that simply purporting to grant a licence to a squatter in adverse possession (unless accepted by the squatter) will not alter the fact that the squatter is in adverse possession and, so, that it will not stop the limitation period from continuing to run.

In Kam To Pui v Incorporated Owners of Lux Theatre Buildings ([2000] HKEC 1014) K took possession of land, fenced it off, put huts there and used it both for business purposes and to house his family. It was found that he had been in adverse possession of the land for the full twenty year period specified in the Limitation Ordinance. Towards the end of the period, the owners’ solicitors had written a letter demanding that he vacate the property but allowing K a few extra days to leave. This was not central to the judgment but it had been argued that this had amounted to a licence and had stopped the limitation period from running. Possession had become, for that period, possession with the consent of the owner of the paper title. The judge rejected the legal proposition that a licence, unless accepted, would have this effect.

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