> Once the house was sold to the new owner for £131,000 by the person impersonating Mr Hall, they legally owned it.
That's nuts. Why isn't it the case that the person who failed to properly vet the seller is out of £131,000 and the house? So I can "buy" a local mansion and then say "oops, I didn't know this random guy didn't own it. Oh well."
It depends on how Title law works in the jurisdiction.
I don't know how it works in this part of the UK, but in many states in the US, the buyer would left holding the bag - the original homeowner would keep the property.
It's one reason in the US that most property sales include a purchase of title insurance.
> I don't know how it works in this part of the UK, but in many states in the US, the buyer would left holding the bag - the original homeowner would keep the property
Different ways of dealing with the problem of fraudulent transfer and property records. In the U.S., the risk is the buyer's. If the property was fraudulently transferred, the transaction is mutable. This makes the sureness of ownership, as well as the record, less reliable, while making ownership per se more.
The U.K. flips that assessment. If the Land Registry says you own the property, you can rest assured you own it. No re-litigating whether that transfer two sales back was done correctly. In exchange, this shit.
If you consider each country's history with respect to property and power, it makes sense.
If the Land Registry says you own the property, you can rest assured you own it.
Sounds to me like you can only rest assured at the moment the Land Registry tells you. After that, it’s only a matter of time before some scammer sells your house out from under you. Not a great system.
Could you use a very small mortgage as a proxy for that function? In my country a mortgage will prevent any transaction if the bank don't agree. This will add a non trivial step for the scammer.
It isn't about property and power, though. It's about knowledge and power. The buyer knows there's a transaction being contemplated. The buyer knows how to contact the seller and/or their agents. The owner does not. The predominant U.S. system requires buyers to guard against known unknowns. The U.K. system requires owners to guard against unknown unknowns. It's a least-cost-avoider problem, and it has a clear answer.
Also the buyer is either a scammer or a dupe. The owner is just a victim. Either way, the buyer should clearly be held responsible and cover all costs to resolve.
> In the U.S., the risk is the buyer's. If the property was fraudulently transferred, the transaction is mutable.
Ironically you're describing the original English legal system centered around deeds.
But a few US States, some of the UK Commonwealth, and England, as it sounds from this article, use the Torrens system[1].
The difference is whether the deeds are primary and the registry a mere copy (or even optional); or the registry primary and any papers reflecting registration a mere copy.
But generally with a Torrens system there is some statutory compensation for fraud cases.
My interpretation - the UK was about having a few gentry owning all the land and a lot of peasants that just work on the land. The US was about giving each settler a Homestead of previously unowned land (Natives not being considered capable of owning land, because racism). So, a registry would be easy to operate in the UK, but the US was too big and poorly connected and had too many land owners to make that viable.
One example is Ayn Rand who said that Natives weren't using land productively and therefore weren't really owners of it.
Torrens title was invented in South Australia in the mid 19th century. It is named for the Australian politician Sir Robert Torrens, who was briefly Premier of the Colony of South Australia around the same time. It has since spread around the world, including a few American states, but has not seen anywhere near as much adoption in the US as in many other parts of the English-speaking world.
Now, the contemporary English system isn’t strictly speaking Torrens, it actually is somewhat of a hybrid between a pure Torrens system (as used in Australia and many other places), and the original English system (which slowly evolved out of mediaeval English law) and which is still mostly retained in the US. But still, to the extent that the records of the Land Registry take priority over the actual title documents, it is closer to the Torrens system than most US systems.
I think the main reasons for the lesser adoption of Torrens in the US have little to do with the reasons you suggest. Trying to link the US non-adoption of it to the dispossession of indigenous people is dubious given that Australia, where it was invented, has a similar history. It is basically due to the greater number and greater conservatism of US state jurisdictions (here I mean “conservatism” primarily in the “slow-to-embrace-change” sense, rather than conservatism as a political ideology, this is the kind of technocratic legal issue about which neither progressives nor conservatives, in the ideological sense, care much), and also due to the lobbying power of the US title services/insurance industry, which sees the greater simplicity of the Torrens system (most of the time, ignoring occasional problems and frauds like this, which can and have happened under pre-Torrens systems too) as a threat to their established business models
Torrens essentially tries to optimise for the most common case, in which title is clear and no fraud is going on, and make that common case as simple and cheap as possible, even if by doing so the outcome in those rare cases of disputes and frauds may not always be completely optimal
I'm not a lawyer but the article implies that once the title is transferred, the new owner owns it! There might be liability with the Solicitor or the Land Registry, otherwise it would appear to be incredibly unfair!
The Land Registry is the final arbitor of who owns what in England and Wales. So yes, right now the Registry says this New Owner owns this property, there is no way to contest this in a court of law, the official Land Registry paperwork is de jure supreme, it has the same legal effect as if an Officer from the Registry was in Court to say yup, that's who owns this property says the Crown.
But, of course what we've got here is apparently Fraud. Presumably the likely legal outcome is that the actual sale price or, if higher, fair market value, must go to the previous legitimate owner. Unless the new owner is shown to have committed fraud.
The Solicitors are required to be insured. And of course the Government owns the Land Registry and so is quite capable of standing any of its potential liabilities, though it seems most likely the Solicitors screwed up here in accepting bogus "proof" of identity.
3.2 Suspected fraud or forgery
If someone suspects that a fraud has taken place or is
about to take place in relation to their property, they
should contact us immediately. In many cases, we will
be able, on application, to enter a standard form
restriction LL in the register, that requires a
certificate to be given by a conveyancer that they are
satisfied that the person who executed a document
lodged for registration as disponor is the same person
as the proprietor.
It will also be advisable to take legal or other
professional advice to try to minimise any loss.
> The Land Registry is the final arbitor of who owns what in England and Wales.
I don't think that's true because for instance there are still properties unregistered (as mandatory registration was phased in until 1990). Certainly it seems possible to rectify the Register, not least in case of fraud [1]
Also, in English law, a valid sale of land must meet strict criteria, including being made by Deed. I am not a lawyer but I don't see how the Deed can valid in this case since it did not involve the legal owner at all!
Since solicitors must check identities (how could they have failed that?) and executing a Deed includes signing it in the presence of a witness I suspect a number of people have at the minimum massively screwed up, and the witness is likely an accomplice.
But, if the Registry says your property is registered, and that Jim owns it, the fact you say it isn't registered doesn't trump that. You would need to persuade a Court that the Registry is wrong, and then they'd need to tell the Registry to fix that. Until both those things happen, Jim owns it.
> I am not a lawyer but I don't see how the Deed can valid in this case since it did not involve the legal owner at all!
Prima Facie there's a Deed which says the legal owner sold it. Now we've got this chap, says he's the legal owner, says he never signed that paperwork. That's a contradiction, which is true? So that's the sort of problem we have Courts for.
My guess is, this chap is exactly who he says he is, there's a fraudster somewhere with £131000 of somebody else's money who won't show up to court.
But of course it's also possible this is a different fraud in progress. The chap who claims it was "stolen" has £131000 in an account in his friend's name, and now wants both the house and the money.
A judge gets to decide the truth of the matter. Often things are clear cut (e.g. the "driving license" proves to be a badly photocopied Photoshop image, a solicitor's clerk admits a "face to face" transaction actually took place on Zoom, the bank account is traced to a known crook who fled the country last week) but sometimes it's just very hard to decide, which is why we need smart, honest people to do that job and decide what's a fair outcome when it's unclear.
Seems like the ID was pretty convincing, and the real owner (assuming the paper did their due diligence!) wasn’t there at the property - so everyone involved may have done a decent amount of checking, but it wasn’t enough because the fraudster knew how to play the system to get through the normal hurdles. It does happen.
Sounds like a court needs to dig in and figure out what is going on for sure.
It sounds like a sophisticated fraud. They probably target clergy or others who have well known public schedules. I assume there is an equivalent of title insurance in the UK that will pay out though.
The original owner is not going to be the one with title insurance though, that's usually bought by the buyer, not the seller, especially not a seller who isn't even aware that there is a transaction.
"Title insurance" isn't much of a thing in the UK. I think this is because the Land Registry gives you something similar as part of the service. Random quote from the web, from the Law Society Gazette, no less: "We already have a land registry which provides a comprehensive guarantee of title backed by the state."
As for whether fraudulent sales should be reverted or not, I've been pondering the question since I read the story yesterday and come to the conclusion that it would be good to apply some common sense:
* Someone buys a house without looking at it, before or after the sale, as an investment because the price seems really attractive. It is then discovered that the owner, who is living in the house, was not involved in the "sale". Obviously they should revert the transfer of ownership and compensate the purchaser.
* Someone buys a field, gets planning permission, builds a house on it, and moves in. Ten years later it is discovered that the real owner of the field, a company in Dubai, was not involved in the "sale". Obviously the transfer should not be reverted and the involuntary seller should be compensated.
Yes I expect that, if pressed, the courts would void the entire transaction and restore the property. The land registry may be the arbiter of who currently owns what, but the courts are the arbiter of what "happened" according to the law.
Otherwise it sets an absurd precedent. If it was not some man's house but a critical piece of infrastructure, the courts are not going to stand idly by and let some random person take possession of Sellafield, or for that matter, Harrods.
But the existing owner will probably settle for compensation instead of fight a lengthy court battle.
No, the courts wouldn't. A genuine innocent purchaser, properly registered at the Land Registry, has good title. (Note: not the fraudster - their downstream victim). The original victim's options for recompense are the scammer, the solicitors who did the conveyance for the fraudster (if negligent), or the Land Registry itself.
Nobody is going to end up as the accidental innocent purchaser of a stolen Sellafield, so that's not a concern. If the government really needs to reverse a transaction under these circumstances it could use a compulsory purchase order or a private act of Parliament.
That’s a bad rule. The purchaser had the ability to thwart the fraud and the true owner did not. The better rule is that an individual cannot pass a better title than he has.
Yeah, maybe. There's a reason different jurisdictions go different ways on this. You could also argue that the true owner could have thwarted the fraud by more careful identity management, and the purchaser (in hiring a solicitor to ensure the bona fides of the seller) has done nothing wrong. And if the true owner was absentee, the fraud might not be uncovered for years, long after the purchaser has moved in and made reliance on ownership.
The bottom line is that there are two innocent victims and one or both are getting screwed. I prefer your rule too, overall, but there are circumstances where one or the other is going to be more unjust in a particular case.
Well, if they made the bank take the hit (until they can get money back from the fraudster, and since most residential purchases are financed with a mortgage) I'd wager that suddenly ID/ownership checks would become bulletproof...
I suspect they'd rather you claimed against the fraudster or a solicitor, with the compensation fund as a backstop. If that is the case, it could be neither: just that most people get recompensed elsewhere.
That's right, I think. The property can be recovered from the fraudster, but not from an innocent subsequent purchaser. There is at least some form of compensation scheme by the Land Registry. And 'selling on behalf of someone who isn't the actual owner' certainly can found a liability claim on the solicitor.
That's wild. Is there any other case where someone gets to keep stolen property as long as they didn't know it was stolen? I have to say if I was in the victim's position, my reaction would probably land me in prison for longer than the fraudster.
I think it’s more ‘if someone goes through an expensive and extensive legal process to purchase at great expense, some real property, starts taking it as their own in good faith, then later what may be the prior legal owner, but who was not who did all the legal paperwork comes back to me and claims fraud - do I have to move?’
The issue is there are scenarios where the person writing the article may not actually be the legit owner - maybe they are delusional, or were squatting, or whatever. Maybe they are in league with the person who took off with the money, etc.
And the person who bought it is out real money on the meantime and is trying to make a home in good faith - it’s a pretty bad situation all around.
I think it's simpler than that, if the claims from the article are true (you still need courts to decide that, and I don't know of a court system where this is suitably fast).
Original proprietor had a furnished house, and the end result should be that they still have the house at no expense and at least trouble: they did not partake in the "sale", so they shouldn't suffer consequences from someone's incompetence or negligence. House is not just a "financial" instrument: it might have large emotional value too (memories, tradition & history, community and neighbourhood...).
Unfortunately, the honest buyer hired a solicitor to act as their agent, and while the solicitor might lose their professional license, buyer should get their damages back from the said solicitor or licensing body, because buyer is a victim of their incompetence/negligence, yet competence and care were guaranteed with the professional license.
Solicitor relies on the Land Registry to be the ultimate arbiter, so they should expect their damages to come from them for the duties they failed to perform.
Regardless of what the law is anywhere, that's how it should work IMHO. Unfortunately, the practicalities of how long it takes courts to (dis)prove a fraud make some of these hard to effectively achieve in a timely manner.
Theoretically, courts could make the process more expedient in cases of inhabiting-properties by "pausing" the transfer and putting the property into government custody, giving temporary use rights to the more likely resulting owner from the preliminary hearing (hey, fake document was involved, sorry, original owner gets to live there for the time being: everyone, please keep all receipts for any work done on the property and about your legal representation so you can be fairly compensated).
There are many European countries where this is the case for movable property. For instance, there was the case of the Fiat factory worker who bought a painting in a railway lost property auction, which turned out to be a stolen Gauguin.
Losing the singular most expensive item you own, that typically contains the rest of your property, with no warning… that tends to end with you on the street which some may feel worse than prison.
I’m not condoning that choice but recognize the consequences are particularly low when you’re already at the bottom.
mate.. it's a matter of perspective. for people that have nothing left... prison doesn't sound that bad.
If I have to choose between ending up on the streets again or prison... I'm pretty sure I'd chose prison this time around. I was young and lucky the first time. Now...
Yeah, that part confused me to. I'm pretty sure that if I bought a stolen xbox from some guy on a street corner and the Police find me with it, they'd not throw up their hands and say "oh well, I guess you own it now, on your way".
I assume there is a specific legal quirk with property ownership.
I believe the 'quirk' here is that the fraud was able to get property ownership updated with the Land Registry, so the new owner is the official owner of record.
Only thing I can think of is eminent domain. Here it using it requires either a specific decree by the national government (as in, the prime minister), zoning plan approved by the elected municipal government, or in some limited cases, apparently involving electric power lines, an agency. The owner is to be informed of the proceedings before they take effect.
The random clerk does not get to do write off your property belonging to someone else, unless your elected representative had a change voice an opinion in a proceedings where a clear public decision by the elected representatives to specifically take away someone's property was made.
It is a societal/legal construct brough up from the historical experience (eg. if a caveman built himself a hammer, they possessed it as long as they took good care of it).
We've redefined what "taking good care of something" means for things you possess, and we made elaborate social/legal constructs to clearly define boundaries of possession.
But this is present even in the animal world, even when it comes to "property" (wolfs mark their territory, so do lions, bees go back to their own hives, etc).
>Possession is a physical/real property of the universe
This assertion immediately falls apart on consideration IMO. Even in simple, controlled circumstances like football, the meaning of "possession" is subject to mutual agreement (i.e. "rules").
You could take some particular definition of "possession" as "natural" or otherwise axiomatic. This is not unheard of, but I think it's a trick of misdirection to place it in the domain of the "physical/real" when it is plainly a political matter.
Interesting side note. That's true for property, but not for cash.
Cash is legally considered fungible. So, if someone steals a bunch of cash and buys something from you with it, even though that specific cash technically belonged to someone else before theft, it can't be reclaimed even if they can prove it.
I'm aware of this, but I do wonder what happens if, rather than using the stolen cash to purchase goods, the thief gave away the money? Either to friends, a random homeless person on the street, or to registered charities. Would that be still considered unreclaimable?
No. If you bought it, you own it. The thief now owes the original owner damages. This is true in the United States and I assume England since it's old common law stuff.
It's why thieves try to steal and then turn over immediately.
No, that’s not correct in the US. If you buy stolen property unknowingly, it can be taken away from you.
Had my TV stolen, it ended up in a pawn shop. Luckily, I had receipt and serial number. There was some paperwork and court order but pawnshop had to return TV to me.
Yup, that is also why there are laws against Receiving Stolen Property [1] in the US. This is defined as:
>>According to general receiving stolen property laws, it is a crime to accept or purchase any property which you believe or have actual knowledge that it was obtained through illegal means, such as theft. However, receiving stolen property is its own separate crime and thus should not be confused with the similar criminal acts of theft, robbery, or extortion.
The quirk is that in the UK you’re not a free man but only a subject and in the end the crown owns everything and now fuck off, filthy peasant, before the king sends his men.
This is true in practice pretty much everywhere governments exist though, it's not really a monarchy versus republic thing. The stick is no less painful if it's called "society's stick" rather than "the King's stick" if the government of the day decide to beat you with it.
Is this really different than any other country? Any government (at least in uncontested territories) can come in and tell you to fuck off, and there's really very little you can do about it.
Quite the opposite. You ask the state to use their monopoly on legitimate use of force to enforce your rights in accordance to law. What you imply is a failed state. The state must maintain the legitimacy of that use to maintain consent of the people, that or it slides into far less prosperous configurations.
Being in a far less prosperous (in a meta sense) configuration is surprisingly not as big a deterrent as one might expect, especially if you are making them angry or the official involved would
get far more prosperous (in a direct, concrete way) along the way.
In France it's the notary's job ( who are the only ones who can validate a sale) to ensure that the seller is who they say they are, and that they do actually own the land/house/apartment. Wonder how that works across the Channel and whose responsibility it was.
It is the same with a Solicitor but if they followed the correct process and the problem was actually with, say, the DVLA who issued a driving licence in the wrong name, I'm not sure who is liable for the error.
In the UK there is no official single form of ID. The way these things work is that you need a few letters confirming your address, then that's taken as gospel. A few years ago I was a "victim" of identify theft which happened as follows:
Somebody ordered satellite TV to be installed at my house. A few days later they went to a phone shop and walked out with an iPhone in my name, using (I assume) the invoice from the TV service as proof of identity. They then did the same with a few other phone companies. The only way I found out about these was when they sent me bills demanding payment a month or so later :-)
They also opened a bank account in my name, which I found out via a credit search, but the bank would not confirm or deny it as I was not the person who opened it.
This last bit is more interesting as I believe it had a different address, but was in my name. Technically that is not fraud, as in the UK names are freely changeable without needing any official registration. I could go into a bank tomorrow and ask to open an account, saying my name is "Alexander Boris de Pfeffel Johnson" (the Prime Minister's full name) and that would be legal. The bank would probably send me away as I don't have any supporting evidence to prove that's my name, but there's ways around that.
You can easily see how you could use this to have enough evidence to back up the claim that you are the owner of the property - especially if the property was vacant and you broke in so you could get the post (I assume the buyer was shown around before they bought it?).
Plenty of folks haven’t updated, or don’t like dealing with it, or ‘lost it’ or whatever.
Most people doing notary/certification on stuff like this are used to that kind of situation, so someone having an acceptable but not ideal ID method isn’t going to slow this process down.
In Latvia, nowdays you cant visit restaurant without a covid certificate verified by ID card or passport. Or to receive parcel at post office. Or when dealing with bank or gov. Etc.
However I can do the following: use digital identification, that uses multiple factors along with an app, that requires using digital certificate from id card to setup. Afterwards its just my device and that app PIN that is required to impersonate me (well and semi-public national personal identification number)… this applies to almost all gov services with few exceptions like operations with property…
Drivers license has been invalidated years ago as an identification mechanism. Let alone for dealing with property - notary is mandatory along with proper identification.
We are looking at an example of just how bad a mismanaged central database can be. I don't want an ID card that gives someone the ability to delete my entire official existence; either accidentally - or deliberately.
In normal countries with central ID systems, nobody can delete your official existence. Worst case scenario is you're wrongly declared dead, but I don't see how "chaos and anarchy and just use random pieces of paper to prove who you are" avoids this problem.
Your identity is on the chip and cryptographically signed on the card. Even if they delete your records, you can still prove you are who you say you are because it’s on the card. If they lost the records, that’s not your problem.
The Notary in France doesn’t necessarily fully do this job. They have an obligation of means, ie check the last 30 years of ownership and permits, but there are many cracks in that system:
- Double ownership for 30 years followed by a proof of ownership from the real, hidden one;
- Or simply it is the notary’s understanding that there is no record past 12 years for example, and yet there is. If they have checked “the normal books”, their duty is fulfilled.
Is there stories of people getting their property stolen this way?
My guess is that in France, if such a story as the article happended, the buyer would be kicked out of the house (and probably lose their money stolen by the fraudsters) but maybe I'm completely wrong.
I remember to have seen a story in France of someone that had bought a house, but someone else did break in and rented it to a family. The people in the house had a rental contract, so they had the immediate right to stay, even it the contract was invalid. Evicting them was a nightmare.
Unless the house/land is not yet registered, I believe that the land registry is supposed to be the ultimate authority and deeds are just piece of papers. Ai think you can always argue ownership in a curt of law of course.
See this[1] thread on r/legaladviceUK. User pflurklurk is normally very knowledgeable of the UK legal system and probably a solicitor himself (although he claims to be just a random shitposter).
While the counties record titles as a matter of convenience, the true title is determined by the courts.
Other countries have centralized registries so that if the country's database says X piece of land is owned by Y, that's final. In the us it can be litigated and title insurance comes into play for the buyer who purchased it fraudulently.
In some cases, the property that goes with a single house will actually be made up of two bits of land, one of which is recorded and one of which is registered. In other cases it's all recorded or all registered.
Now this is not a nationwide centralized registry, it is a state-wide registry within Massachusetts, and my understanding is that the sort of litigation you could get for recorded land does not happen for registered land, because transfer of registered land is already a Land Court decision.
Key quote from the above link's description of registered land:
As the current state of title is sequentially updated
by the registration of future transactions, it embodies
a certificate of title that not only evidences title,
but in fact guarantees title and is subject only to the
exceptions provided by statute and matters of federal law.
You are confusing who actually owned it, or who morally owned it, with who legally owned it.
The claim is not that, once the legal issues and the fraud get untangled, the buyer will be held to be the rightful owner. The claim is that AT THE MOMENT, while the 'new owner' is listed in the Land Registry as owning it, and the 'old owner' isn't, the 'new owner' temporarily legally owns it.
They have written this article as though to suggest that this is final and the original owner has no recourse. That isn't the case. What is the case is that the police don't have a remit to investigate the fraudulent sale. If person A is listed in the registry (they 'legally own' the property) and person B isn't, the police will follow person A's instructions to remove person B from the property, but not vice versa.
> AT THE MOMENT, while the 'new owner' is listed in the Land Registry as owning it, and the 'old owner' isn't, the 'new owner' temporarily legally owns it
Not an expert on British law, but I don't think this is the case. The new owner owns it.
Not temporarily. Fully, permanently and properly. The previous owner was fraudulently deprived of it, and can likely get damages from the parties who signed off on the conveyance. But I don't think they have the right to reverse the transaction against the new owner's will.
> If you're not an expert on British law what makes you feel able to make such a confident and surprising claim?
The hubris of an internet commenter?
Also, it's not surprising. It's unusual for a common law country. But in most jurisdictions, particularly those on statutory law, if the buyer is unrelated to the fraudster and is in possession, the register cannot be altered [1].
This comes, in most places, out of the land registry being a reaction to protracted property disputes. (Often violent.)
I'm guessing he had a fraudulent bank account opened in the owners name with the address as the house and then stole the bank mail as the bank mail would have apparently worked as verification as the original person for the sale according to this [0]. This story is scant though and needs more details.
For example, the FBI was able to partially recover the Colonial Pipeline ransom, although that seems to be in part because the perpetrators were stupid by trying to sell it on a US exchange, https://en.wikipedia.org/wiki/Colonial_Pipeline_ransomware_a...
Since it was not sold by the owner it is difficult to argue for the legality of the transaction. Whoever claims bought something has nothing in fact, the person they've been in business with had nothing to sell. Selling nothing is nothing. The records are false!
If the authorities assume things are in order here they should also be prosecuted for negligence or being accomplice and at least revert the FALSE transfer of ownership. (are we sure here that the 'buyer' is an unsuspecting party theyself?...)
This sounds entirely like how you want things to work, or how you feel they "should" work in a just, fair world. It doesn't sound like you have any legal education or training to base this on.
But I greatly prefer your version of events to what happened in the article so please prove me wrong!
Someone sold something that this person did not have. Sold nothing. Then what the buyer has? Nothing! There was an error in registering the transactions, it was a false transaction.
How my will has anything to do about this or affecting if selling nothing becomes something or not?
Where exactly a legal education needed for being able to recognise that the real owner did not sell or give away his property? If I am not a solicitor I cannot possibly comprehend what is a theft, fraud, or recognise bodily harm or crimes in general that are condemned by the society? I do not buy into that. The recognition of these kind of crimes are older than institutions dealing with those. If the stealing of the property is not prosecuted then the system is wrong, needs a fix.
That's nuts. Why isn't it the case that the person who failed to properly vet the seller is out of £131,000 and the house? So I can "buy" a local mansion and then say "oops, I didn't know this random guy didn't own it. Oh well."