Another property scam- Sydney Sunday Telegraph story

[geoffw]

http://www.dailytelegraph.news.com.au/common/story_page/0,5936,5679003%5E21302,00.html

Lawyers in $12 million house scam
By AMANDA PHELAN and ADAM HARVEY
15dec02
ROGUE lawyers are stopping innocent home-owners from selling their properties in a multi-million dollar scam involving forged property documents.

At least $12 million has been collected through the scam, which is now under investigation by police fraud squad officers and the NSW Law Society.

Essentially, lawyers are faking caveats on other peoples' properties, which they then use for guarantees on buying other properties

 

[michaelg]

I can't believe these lawyers are stupid enough to think they won't get caught?

Imagine the paper trail they are leaving?

Michael G

 

[investor]

Hmmmm

I've one of my title deeds at a lawers office. I'm not using the firm anymore better go get the papers.

Regards

 

[asy]

If anyone recalls, I did a post about indefeasibility of title, and mentioned something like this...

Was only a matter of time

asy

 

[geoffw]

If anyone recalls, I did a post about indefeasibility of title, and mentioned something like this...

Is this the post?

http://www.somersoft.com/forums/showthread.php?postid=3961#post3961

I was going to ask you what indefeasability was, but you defined it well in there

(Indefeasibility means the non-challengeability of the registered owner)

But is this scam the same thing? I don't understand the finer points. But it appeared to me that the title was intact with the original owner- but lawyers were forging caveats against the property in order to secure other loans- and the owner could not sell until the caveat was proved to be fraudulent.

 

[Adam]

So is there anyway to protect yourself from this?

Also is there any way to stop people from owning your home when you go on holidays (this was in the Post by asy that geoffw linked to)

Thanks for the heads up on the article, though it would have been nice to know how to avoid it as well

Disclaimer: This post has been bought to you by Paranoia and Panic.

Edit: 1st round of typos.

 

[asy]

Geoff,

yep that's the post I was talking about...

Adam...

No, just use care with your title. Not all solicitors are 'bad'... In fact I would go so far as to say a VERY VERY small % of solicitors are not fine upstanding citizens. (Just like agents!!! hehe)

asy

 

[geoffw]

a VERY VERY small % of solicitors are not fine upstanding citizens

Hehe... is that like, "it's the 99% of bad solicitors who give the others a bad name"?

I did actually receive something in the mail last week. I'd been issued with a notice of caveat against my property. But the caveat was in my name, having caveat against the property held by my family trust (NSW property). I don't know if this is normal, I have not dealt with caveats (as the owner) before- it's good to receive the notification, and at least to be given a chance to refute. I had not connected the notice with this story before- and I don't even know if it's something new.

 

[Adam]

Hi Asy,

When you say 'just use care with your title' - does that just mean that I put the title document in a safe deposit box in a bank over leaving it with a solicitor.

Or do I have to do something more?

 

[asy]

Originally posted by Adam
Hi Asy,

When you say 'just use care with your title' - does that just mean that I put the title document in a safe deposit box in a bank over leaving it with a solicitor.

Or do I have to do something more?

Well, Adam,

that's a really difficult question.

Where is it safe? I don't know. Not 100%... My parents have theirs in a safe deposit box... Mine were always loaned against, therefore the bank kept them.

Nigel? What do you think?

asy

 

[geoffw]

I've never seen the title to one of my properties- the bank has them. Even my PPOR is used as security for others. What does a title look like?

But in this scam, it didn't matter. The caveats were fake ones, and it was up to the owners to prove they were fakes. While this was being untangled, the owners could not sell properties.

It surprises me that, in this computer day and age, caveats appear to rely on paper documents.

 

[Kevmeister]

Interestingly, when we bought our land in 1995 (to build our PPOR) we bought it from Urban Land Authority. Settlement went through fine in Sep 95. In Nov 95 they put a caveat on the property to ensure that the land could not be resold without a dwelling having been constructed on it (this was all up-front in the ULA contract, and no big deal since we bought the land to specifically build our PPOR).

Recently we have just applied to establish a LOC against our mortgage and Westpac has said they would not settle unless the caveat was "removed".

The interesting part of this is that we NEVER received any advice that the caveat had been applied to the property.

We never had to sign anything agreeing to the caveat or anything, so there is no implicit proof in the caveat itself.

On the other hand, I guess caveats might be less effective if the title-holder had to "approve" them... For example a Council might lodge a caveat against a property whenever there was more than $X in unpaid rates.