Selling A Property For $1.4m+ That Was Acquired Under The Law Of Adverse Possession

Source: RealEstate.com.au listing for 6 Malleny Street Ashbury

In a rather amazing and rare story, a Sydney property developer has placed a home on the market for sale with an asking price of roughly $1.5 million which he did not purchase, and which was not gifted from family or an acquaintance. It has been awarded to him legally under the rule of adverse possession.

In this article we discuss the law of adverse possession and the history of this extraordinary case. 

​What Is Adverse Possession?

​While a very complex legal principle, adverse possession allows a person to gain title to a property if they have occupied that property for a certain amount of time and nobody has disputed their possession of the property. 

In order for a person to successfully claim title to a property over the true owner, a person must gain uninterrupted possession of a property for 12 years or longer in New South Wales (durations can vary in other states).

The person claiming ownership must have evidence of their occupation and possession of the property for the required duration, and this possession must be held in a peaceful manner and without the consent of the original owner (i.e. "adverse" to the title of the original owner). 

If any form of permission was given to occupy the property (e.g. a licence, lease, or some other agreement), adverse possession cannot be claimed because it will be clear that the owner never intended to pass over ownership.

To claim adverse possession, an applicant must prove actual, factual possession of the land to the exclusion of all others, and must be able to show an intention to possess the property. Factual possession can be proven by showing an appropriate amount of physical control, such as placing locks or fencing on the property to the exclusion of others. 

How Did The Developer Acquire The Property Under Adverse Possession?

​In October 2018, the New South Wales Supreme Court awarded a 3 bedroom home in the Sydney suburb of Ashbury to Bill Gertos under adverse possession, despite a challenge from the relatives of the last listed owner. 

Mr Gertos told the court he came across the home in 1998 while visiting a client in the same street, after noticing it had remained empty since its last tenant died that same year. He claimed found that the house was open and the rear door was "off its hinges and placed to the side".

He then changed the locks, spent about $35,000 renovating the home and began to rent it out in 1998. 

In 2014 he spent a further $108,000 on renovations, continuing to rent the property to tenants. 

The registered owner of the property, Henry Thompson Downie, died in 1947. Downie's daughter and two grandchildren only became aware of Gertos' claim on the property in 2017 after being notified by police. They put forward a claim to the Supreme Court that they should be recognised as the beneficial owners of the property, but this was not upheld. 

Supreme Court Justice Rowan Darke found Mr Gertos had sufficient evidence he invested money into fixing the home, paid taxes on it and leased it to rental tenants. "I am comfortably satisfied that since about late 1998 Mr Gertos has been in factual possession of the land with the intention of possessing the land," Justice Darke said.

The family was ordered to pay Mr Gertos' legal costs. 

The Acquired Property Is On The Market

In late October 2019, one year after being awarded the property by the Supreme Court, Mr Gertos has placed the property he acquired by adverse possession on the market. 

A link to the sales listing for 6 Malleny Street Ashbury provides little insight to the history behind the 3 bedroom, 1 bathroom, 1 garage property sitting on 498 m² - though estimates are that the home would sell for between $1.4-$1.6 million. 

Cases such as this are relatively rare given the complex and technical legal nature of claims of adverse possession and expert legal advice should always be sought in such cases. Find here a succinct summary here by Fox & Staniland Lawyers of the process of Acquiring Title by Adverse Possession in NSW.