How to Steal a House


Land Title Change Creates Concern

Thieves respect property.  They merely wish the property to become their property that they may more perfectly respect it.

- Gilbert K Chesterton

Land: A part of the earth's surface, considered as property.
The theory that land is property subject to private ownership and control is the foundation of modern society, and is eminently worthy of the superstructure.

- Ambrose Bierce

by David King

Your castle may not be as secure as you think.  A group of Christchurch lawyers is warning a new land transfer system could see homes literally stolen from under their owners.

As part of a move to a new electronic land registry system, Land Information New Zealand (LINZ) has done away with the old system of providing duplicate freehold titles, which were usually held by either the owner of the house, their solicitor, or the bank holding the mortgage.

The main title is still held at the land registry.

But Ross Turner, a partner and property specialist at Christchurch's Rhodes and Co, said doing away with the duplicate title had opened up the system to fraud.  Under the old system the fact that the owners – or their
representatives – held on to the duplicate title gave them security over any changes made to it.  But now the only copy is held by LINZ, which he believes clears the way for any determined fraudster to claim access to your property.

"Anyone can fill out a transfer form, represent what they can claim is your signature, and transfer your house, as simple as that.  I'm astounded that it's been allowed to happen.  This is potentially worse than a leaky house.  This is no house.  It's the highest level of security people had and it's been cut off at the knees."

He said the problem was made worse by New Zealand's law of indefeasibility of title, which means once a title is transferred it can only be transferred back if it is proven a fraud has taken place.  The fraud could be hard to prove or the title could be sold on by the fraudster to a third party acting in good faith, meaning they could end up with more right to your property than you.

"The problem is that you have to prove the person on your title is the perpetrator of a fraud.  The actual fraudster could have sold it on to someone else."

Another Christchurch lawyer, Richard Burtt, believes the system has been made more vulnerable by the changes.  He said: "I'm worried there is an increased possibility for fraud.  I think the old system wasn't foolproof either."

Registrar-General of Land Robbie Muir said he was aware of the lawyers' concerns, but was satisfied everything had been done to minimise the risk of fraud.  The new system, which was part of a move to automate the land title system, had the approval of the banks and the Law Society.  He said: "We are satisfied that the security changes make it as safe as the old system."  Mr Muir said it would take "a fairly sophisticated fraud" to enable them to get around the system.  He pointed out that Queensland had introduced similar changes, although duplicate titles are still available there on request.

Mr Turner has raised his concerns with the Canterbury District Law Society.

Source: Stuff 30 December 2002

So the Registrar-General is "...satisfied that the security changes make it as safe as the old system...", huh?  For some comments on just how safe the old system was, please see Sources of Information.

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