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Fraudulent Property Transactions

12th July, 2013

The recent case of Fitzwilliam v Richall Holdings Services Ltd [2013] EWHC 86 (Ch) considers the issue of registration of property at the Land Registry in light of the Land Registration Act 2002 where there has been a transfer involving fraud.

In this case, “X” a business associate of “A”, a registered proprietor of a property, purported to sell the property to “Y” using a forged power of attorney which A had supposedly granted to X. Y became the registered proprietor of the property.

A applied to have the register rectified and sought an order that the property be transferred to him on the basis that although Y had obtained the legal title, Y held the property on trust for A.

The court considered the decision in the case of Malory Enterprises Ltd v Cheshire Homes (UK) Ltd [2002] EWCA Civ 151 which predates the Land Registration Act 2002. In that case, it was decided that where a property has been transferred fraudulently, the “real” owner of the land remains the beneficial owner with only the legal title being transferred as a result of the fraudulent transaction. In Fitzwilliam v Richall Holdings Services Ltd [2013] EWHC 86 (Ch), the court followed the decision in Malory. As A remained the beneficial owner, the court ordered that the register be altered to show A as the registered proprietor.

A key objective of the Land Registration Act 2002 is to ensure that there is an accurate register of titles to land. Clearly, the decision in the case of Fitzwilliam v Richall Holdings Services Ltd [2013] EWHC 86 (Ch) highlights a significant problem in achieving this aim

For more information on this or any other property dispute matter please contact Elizabeth Corcoran on 01244 405512 or email [email protected].

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