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!
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.
Nonetheless, here's how the Land Registry handles matters of fraud: https://www.gov.uk/government/publications/rectification-and...
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.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.
[1] https://www.gov.uk/government/publications/rectification-and...
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.
Sounds like a court needs to dig in and figure out what is going on for sure.
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.
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.
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.
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.
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.
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).
I’m not condoning that choice but recognize the consequences are particularly low when you’re already at the bottom.