New Zealand Law
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Fortunately for your mother-in-law there is no law which creates squatters rights in New Zealand. The term adverse possession is sometimes used, but if someone has just started using part of the property over the last few years, that does not give them any right to the property. If there is no lease in place, and the property is sold, the neighbour will need to negotiate an arrangement with the new owner, or stop using your mother-in-law's property.