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Property Sale on Forged Document Was Void

PLEASE NOTE: Information in this article is correct at the time of publication, please contact DFA Law for current advice on older articles.

A businessman who had an £850,000 London property sold from under him by a forger whilst he languished in prison in the Middle East has been handed the property back by a judge. The High Court ruled that the purported sale was void and that the property should be re-registered in the businessman’s name pursuant to Schedule 4 of the Land Registration Act 2002.

The businessman had spent almost three years in a prison in Dubai, on charges of aiding and abetting a bank fraud, before he was acquitted. During that time, he was isolated from the outside world. Mobile phones were banned and access to pay phones was extremely limited.

During his enforced absence from the UK, a man who he had hoped would intercede on his behalf and assist his release forged the businessman’s signature on a power of attorney and proceeded to sell his property to an unwary buyer. The forgery was proved by a handwriting expert and ultimately admitted.

The property was transferred by the forger, purportedly on the businessman’s behalf, to a company which bought it in good faith. However, the company must now pay the price for the forger’s activities after the Court ruled that the businessman had remained the 100 per cent beneficial owner of the property throughout.

The Court’s ruling that the transfer of the property was void and did not amount to a ‘disposition’ within the meaning of Section 29 of the Act means that the buyer must also account to the businessman in respect of any rental income it generated from the property. However, the company is entitled to be reimbursed more than £290,000 it spent on paying off the mortgage and renovating the property.

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