So were the real estate agents fooled by virtual estate agents?
Australian authorities have launched an investigation after Nigerian fraudsters sold a house using email and fax, leaving the legitimate property owner A$500,000 out of pocket in the process. Roger Mildenhall, a resident in South Africa who owned a set of investment properties in Western Australia as an absentee landlord, only …
Isn't it the new owner the one who is out of pocket? 'Cause they will lose their new property when it's given back to the legitimate owner after the completion of any police investigation. The legitimate owner (Mildenhall) is still the owner of the property because a fraud doesn't count as a legitimate transcation.
Unless things are upside down in Oz.
Mine's the one hung upside down.
I always thought that Australian law was based on the british system, and in Britain you cannot be the victim of this fraud because it would be the buyer who would loose under these circumstances. An owner always has title to property unless they dispose of it. In this case the person who "Sold" the property did not have title to the property so the transaction would have been void. In the same way if you buy a stolen car it will be recovered fro the buyer as the owner "Victim" of the theft did not give up title to the car so it would have remained their property.
I will be surprised if this matter is not resolved in a similar way after a court case in Australia.
So the owner might (possibly) get the car back, but in what state? Did the new owner have it serviced regularly? What is the resale value of a recovered stolen car? How much will it cost you to insure a car of unknown history?
Getting your car nicked is always going to be bad news, but geting a property nicked ... multiply by 100.
IANAL, but my understanding is that real estate is a little different than for most other property, at least here in Canada, and it seems it's likely the same in Oz. For something as big as real estate, there HAS to be a "final authority" as to title, and that's the Land Title Office. Basically, you need to be able to go the land title office and find out, definitively, who the owner is. In the situation at hand, the fact that title was transferred fraudulently is beside the point: the new owner, in good faith, had title transferred to him/her and paid up.
It sounds a little odd, but what's the alternative? Who would EVER cough up half a million or a million bucks for anything if they couldn't be absolutely, 100%, assured of getting something for it? What if the fraud was four, five, a dozen, transactions ago?
Don't get me wrong, the lawyers and real estate agents were likely lax in doing their duties in this particular case, and the original (real?) owner must be compensated somehow, but I'm just explaining how, as I understand it, the new owner is NOT the one on the hook.
In Australia, we use the Torrens land system, in which the title passed to a bona fide purchaser (a purchase in good faith) is always valid, and takes precedence over the title lost by the former holder.
Which means that it's tough cookie for anyone who loses property to an innocent third party via fraud.
Something like this was talked about on BBC R4's face the facts (or similar) just last week. A house was sold from under someones feet - the courts and land registry just said that they need to tighen procedures, presumably leaving some one else to carry the can for their ineptitude.
As I recall, from the dim and distant past, Australia has a peculiar real estate system where the equivalent of the land register is ALWAYS legally right, even when it's wrong - this principle is written into their laws. So even if it was sold totally fraudulently, the innocent new owner is indeed the legitimate owner, and the original 'real' owner is indeed stuffed - stupid system IMHO, and arse about face from the UK system.
I still don't see how they can be out of pocket tho - there must be a whole raft of people they could claim the money from, or force to buy the house back for them - from the estate agents to the solicitors to the land registers, all of whom accept fraudulent paperwork.
This couldn't happen in Ontario, Canada as married couples have to both participate in all transactions, even if there is a single name on the property title.
It came about since on occasion, one spouse abandoning the marriage would load the property up with a mortgage, realise the value in cash, then abandon the other spouse and the property.
Therefore, both spouses with ILA (independent legal advice - separate lawyers) have to participate.
I have two questions: (a) Why does the original owner lose ownership as he received no money; (b) Why weren't the funds frozen in the Chinese account?
Give it to the Nigerians to find holes in a system. Guess Australia will review it's procedures.
One of the consequences of the Torrens System is that a purchaser who acquires land through a forged or fraudulent instrument, but is not a party to the fraud, will receive an indefeasible title on registration of the forged or fraudulent instrument, and the former owner will not be entitled to have the title restored or to monetary compensation from the new owner/purchaser unless the owner has been deprived of title as a result of forgery or other fraud, then his or her right to recover the land is converted to right to compensation. Also, the former owner is not entitled to have the title restored and is statute barred from commencing an action to recover Torrens title land against the registered proprietor - go figure.
Mine's the beer because if I was that fellow, that's what I'd be drinking... now... and lots of it.
How can they be liable for capital gains tax unless the tax man can demonstrate that they actually made a profit. Presumably the tax man in Australia is as stupid as all the politicians over there too. Oh and the population. How many of them voted for an immigrant who was promising to do something about immigration. What would he do, deport himself?
Leaving aside dumb aus laws that now make the property legally the purchasor's, might there be a possibility that the guy who got shafted can simply claim this against his home building's insurance? Certainly in the UK buildings insurance covers against theft with usually no conditions against this being upto and including theft of the entire house, which is essentially what's happened here.
Regardless of whether the aus legal system now considers the buyer the legal owner of the property because they werent involved in the fraud, the fraud still happened and resulted in the theft of the owner's house, which is (might be? Would in the UK anyway) be insured against theft.
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