It can happen. Section 58 of the Land Registration Act 2002 provides that if a person is listed as the proprietor of a legal estate with HM Land Registry it is conclusive evidence of ownership.
Imagine losing your house after it was effectively stolen because the law favours a third party.
Case law (Barclays Bank plc v Guy 2008) dictates that while the rightful owner can restore his or her name as owner, if the mortgage was granted through the lender relying on indisputable title, albeit one effectively stolen, the mortgage charge remains and must be repaid.
Worse still, if the house had been sold to a third party everything would be lost.
The case law involved a house where a tenant registered the title fraudulently and used it to obtain a mortgage from Barclays. The owner wanted complete ownership of his house returned but only managed to re-register the title. Barclays kept its charge on the property so the money would have to be repaid when the house was sold – unless the fraudster could be found with the money.
You can prevent becoming a victim by popping in the post a simple form ‘COG1’ (Up-dating Registered Owners’ contact address) with evidence of identity. It tells HM Land Registry to amend the record for your property to provide your current address for correspondence. You post the form with evidence of your identity and its job done.
For more information visit the Land Registry website
Lisa Simon, Partner
Head of Residential Lettings, Mayfair
T: 020 7493 0676