There are a number of possible reasons for this. For example, the original proprietor may have abandoned the land or died, as was the case for a number of properties in Cardrona in Central Otago. These properties were originally purchased by gold miners in the late 19th century but were abandoned when the goldfields became less profitable.
Anyone who has used the land for a continuous period of at least 20 years, without the registered proprietor’s consent, such as a squatter, or someone with an unregistered lease, may claim ownership by ‘adverse possession’. The current proprietor would need to provide adequate evidence of their continuous occupation of the property to the Registrar, in order to have the title recorded in their name. Otherwise, the property will remain ‘limited as to title’, and not be subject to the rule of indefeasibility, meaning the Crown will not provide compensation for loss resulting from the defect. These situations are rare, but should an affected transaction arise, the prospective purchaser would need to be fully informed of the situation and recommended to seek independent legal or technical advice before proceeding to enter into a transaction.
