b>The “one lot and balance scam” land scam is a difficult thing to prove. It is mythical like a unicorn. You might see a glimpse of golden horn here; a whisk of white tail there but nothing evidentiary.
You hear rumours over the years; the odd comment from a bureaucrat before he shuffles away; a conversation in hushed tones that alleges a lot and proves nothing. Sometimes you find the odd oblique reference in official documents about “problems with one lot and balance subdivisions” and a comment from a Councillor that the titles to some major areas in Hobart were issued “all in one go” to avoid “difficulties” with one lot and balance subdivision.
If you look at enough Tasmanian land title documents you do get an idea of how such a scam might work, however the exact mechanism still eludes. Looking at the title 135791/1 to an area of Crown/Forestry Land in Golden Valley bought the unicorn into focus for the first time.
A scam is like a magic trick and getting evidence on how a magical trick works is very difficult as James Randi knows. Proving how a magic trick works requires a lot of expensive equipment as the hand is invariably quicker than the eye. However you can work out how both the magic trick and the scam work as an intellectual exercise. You don’t need evidence to show the mechanism – you just need to describe a logical process of how they could possibly take place. The following explanation is a thought experiment and probably only of interest to fraud examiners. However we will press on.
A “one lot and balance” subdivision of land is one where there is a large initial title to land and lots are subdivided off that large title one at a time as a purchaser is found. Another name for it is progressive subdivision. Much of Tasmania was subdivided in this way.
The large parcel as yet unsold is retained in a “balance” while the new subdivided lots were given different title numbers. The balance title had its original title number for instance 12345/1 or was distinguished as various editions of the original title number each time a lot was sold for example 12345/1 “First Edition” “Second Edition” and so on.
As time progresses naturally you will be left with a smaller and smaller balance still in the original title number. Usually this results in only one small parcel left at the end of the subdivision process. If you turn to the actual title plan 135791/1 you will see that the word “Balance Plan” has been struck out.
However according to an email from the Principal Examiner (Registration with the Lands Titles Office, folio 13579/1 comprises parts of a title left over. He says in an email received on the 4/11/12 that:
“When you go into LISTmap, it will show all the areas comprised in 135791/1 in red hatching that is to say they are all the pieces left in that title, all the others pieces that were hatched in the title plan have been taken out of the title and had separate titles issued for them.”
In other words he is saying 135791/1 is a balance plan or parcels of land left over from a larger title.
If you look at the Description of Land panel on the front of the title you can see the Derivation. This means where that title came from. The Derivation says: Whole of Lot 1 on Plan 135791. The present title is also Lot 1 on Plan 135791.
Now the one thing you don’t want to do, if this is a one lot and balance subdivision title, is let that small balance (or land left over) issue from the Land Titles Office with its original title number.
If Lot 1on plan 135791 does comprise “all the pieces left in that title” then there will be a plan to the whole of the original Lot 1 of 135791 as it existed prior to subdivision. Releasing the remaining titles with the original title number effectively subverts the registration of all the other previously subdivided lots.
This is because if one of the small “balance” lots is sold and it has the same title number as the original title then it would be a very easy matter to attach the plan to the original Lot 1 of 135791 to the smaller balance title. This would comprise the entire area of the original title without the cross hatched parcels. If a potential purchaser is given this plan to “walk over”, buys the land and the transfer registered, this would be extremely difficult to undo. The end result would be an underlying title to all of the subdivided land.
It is of course understood that title registration processes are different across all jurisdictions therefore this scam could morph into all sorts of different presentations. However in our thought experiment we can say there are three specific conditions for the One Lot and Balance scam.
These are:
1. One lot and balance subdivision of land or a title that purports to be the result of one lot and balance subdivision.
2. The balance title has the same title number as the original undivided lot.
3. There is a transfer in which the plan to the original undivided lot is attached to the title for the remaining balance of the land.
This is a very simple scam requiring only two people, an insider and a potential purchaser. It would also be almost impossible to detect as the only evidence would be the Certificate of Title held in the name of the fraudulent purchaser. Not only that but if detected, the insider could explain it all as simple “mistake”. Therefore there would be no consequences.
This is not something you are going to come across in a residential subdivision. No-one is going to come up to you and say “Oh by the way. I actually own all the land around here.”
That will not happen, but the one lot and balance land scam could affect governments and government agencies.
This is because individuals in government agencies, if ever they had any sign that this sort of thing was happening, would probably not be able to say anything about it. For one thing there would be a huge amount of embarrassment involved and for another how does anyone go about questioning proceedings in the land registry? The sanctity of state title registration is one of the fundamental pillars of good government and society as we know it. Opprobrium would result for the person who raised the issue. In other words anyone who did succeed in carrying out a one lot and balance scam would have the affected party in a position of confusion and compromise.
Interestingly enough one of the ways you could fix such a situation where you had another title registered underneath a wide expanse of Forestry Tasmania land would be to vest the land back in the Crown thereby getting rid of the interlopers.
There is another aspect of 135791/1. Despite the crossed out words “Balance Plan” it does not look like a balance plan. This is because the cross hatched parcels of land look like Crown grants, not one lot and balance subdivision. However the Principal Examiner (Registration) at the LTO said that the parcels in 135791/1 are “all the pieces left in that title.”
A later email received on the same day from the Section Manager Plan Records at the LTO gives another view:
“P 135791/1 is the original plan we have for this Lot. Prior to this we had nothing lodged or registered in the Land Titles Office as related to this land.”
In other words he is saying that this registration is a “one off” and there is only the one plan and the one lot. However if we look again as the Description Panel on the title we can see that it says “Lot 1 on Plan 135791 (Section 27A of the Land Titles Act). Derivation: Whole of Lot 1 on Plan 135791 Gtd to The Crown”.
If this is just Lot 1 on Plan 135791 then there is no need for the use of the word “Derivation” or for the further description of “Whole of Lot 1 on Plan 135791″, a simple “Lot 1 on Plan 135791” would suffice. The use of the word “Derivation” in this manner combined with the use of the word “Whole” implies that Lot 1 on Plan 135791 is not a “stand alone” registration but that the lot has been derived from a larger title.
Put simply there is no need to use the folio numbers twice and the “Derivation” should be “s27A of the Land Titles Act” and perhaps some sort of dealing number, deed number or reference to show how the Crown came to be in possession of the land. That is all that is required.
While this may seem pedantic, it is apparent that the Principal Examiner (Registration) was confused by the title and plan and was under the impression the lots had been removed from a larger title.
I am not saying that there is any wrong-doing in the case of 135791/1. What I am providing is a theory or explanation about what could happen if the numbering of the titles in folio 135791/1 and ambiguous wording in the text and on the plan is not corrected.
Two things that certainly would help prevent a “one lot and balance” scam occurring would be to make sure that the staff are not confused about whether a “balance” title is involved in the first place and also making sure there is no circularity in the title numbers in the description of land panel.
If you google “one lot and balance scam” you won’t find any reference to it and after all I have just made it up. However it does work as a theory and theories can be tested. For example a random historical selection of one lot and balance subdivision plans could be audited to make sure that all the balance titles have been accounted for. Titles which have title number “circularity” (the same title number used twice) in the folio text could be surveyed and followed through to see what happens to them.
While there is obviously no harnessed and saddled unicorn here, the “one lot and balance” land scam does work as an intellectual exercise and two of the three elements needed to make it work are found in folio 135791/1.
The only way to prevent these potential problems is to not have progressive subdivisions in the first place; not to confuse ordinary lots with balance titles and if you do have balance titles make sure that balance titles, or parcels of land left over, are registered with a unique identifier before transfer.
Download:
135791-1-fp.pdf
135791-1-ft.pdf
Laurie Levy is not a lawyer or an expert on anything at all. He believes that land registration is essentially logical and that the average person can understand it. He is interested in looking at cases or problematic or anomalous land registration and he can be contacted at [email protected]
