The policy affects 4000 homes backing onto 30 kilometres of disused laneways in 10 suburbs, including Preston, Reservoir, Coburg, Northcote, Fairfield and Thornbury, and involves council trying to sell parcels of laneway to adjoining properties.

Owners who have had sections of laneway fully enclosed in their property for decades have been shocked to receive council notices saying that part of what they believed to be their back garden must be split between neighbours, or sold off to the highest bidder.

Greg Goldenberg, a Reservoir resident who successfully battled to save his garden, says other residents have lost large sections of backyards they had used exclusively for up to 40 years because council had claimed full rights to the land.

"The council said if the land was sold to someone else, and the resident refused to vacate, they would forcibly take the land, relocate the fences, and charge for the exercise," he says.

Former Darebin councillor Bo Li accused the council of "placing 70-year-old pensioners against cashed-up developers who see a 10-metre strip of land that's worth a lot of money to them, because it means they can build an extra unit".

Documents provided to Fairfax Media show council giving residents incorrect legal advice and pressuring them to buy sections of laneway it didn't actually own, because the titles were still held by long dead 18th or early 19th century subdividers.

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The documents also show council officers enforcing the policy two years before council voted to adopt it.

After distressing arguments with council, a growing number of residents are using adverse possession laws that enable them to gain ownership of a disused laneway if it has been fenced inside their property for 15 years or more.

"There are three major cases other than mine that were won in exactly the same way, and there would be at least 24 other adverse possession claims still going through the titles office within the Darebin area alone," Goldenberg says.

"The council used what were effectively bullying tactics and some local pensioners lost backyards they'd looked after for many decades."

Northcote resident Andrew Schudmak was shocked when told part of his property enclosed for more than 30 years would be auctioned off.

"Slicing off three metres at the side of my property would drastically reduce its value and visual appeal and require the demolition of my garage," he says. "The council's policy deliberately sets neighbour against neighbour and has caused huge distress."

Schudmak says after the council refused his offer of $40,000 for the land, he was able to gain title by adverse possession at far less expense.

Arthur Stabolidis of Reservoir, another successful adverse possessor, tells a similar story. "The agent who sold me the house didn't point out that 75 square meters of the land was marked as a road on the Section 32 papers," he says.

"When I talked to councillors, they said I could be up for $75,000, that the land would be either sold between neighbours or go to the highest bidder if we couldn't agree, and that I'd need to pay the costs of removing trees and replacing fences."

Darebin mayor Kim Le Cer - elected to council last year - did not respond to questions about council's past actions, but described the current policy as "problematic and inconsistent with community expectations".

"I am concerned the review called for in 2015 has not already taken place, and have been reassured by officers today that consultation will now urgently take place in order to revise the policy," she said.

Phillip Leaman, of Tisher Liner FC Law, a leading expert on adverse possession, advises people to seek legal advice before responding to council offers to sell them unused roads, old laneways or reserves that are enclosed within their properties.

"In many cases, residents can acquire the land without paying the council anything," he says. "Even if they have only owned the property for a short time, it's possible to prove previous owners have had the land enclosed for decades."

The Victorian Titles Office says it receives an average of 200 adverse possession claims a year, and that usually only 25 of them are either rejected or withdrawn.