The unsolved mystery of who owns 221b Baker Street

https://qz.com/1245110/the-unsolved-mystery-of-who-owns-sherlock-holmes-130-million-home/

by sohkamyung • 8 years ago

147 84 8 years ago

gumby• 8 years ago

It seems pretty clear that the massive gains in high end real estate in Manhattan and central London have been driven by offshore money, some (perhaps most?) of which is money laundering (buy something liquid for X -- even if you overpay and end up selling at a "loss", what you get out has been laundered). But this is all at the very high end -- you see in manhattan that houses people actually live in sell at half the $/f2 that unused "investment" properties do. So are they really driving up prices and pushing people out? I don't know.

In Palo Alto, Chinese money is flooding in and pushing up prices, but the houses are actually inhabited, so yes, it's driving up prices but it would be harder to complain that something nefarious is going on (and indeed I haven't seen any such complaints).

djrogers• 8 years ago

money laundering (buy something liquid for X -- even if you overpay and end up selling at a "loss", what you get out has been laundered).

You're missing a step in the money laundering here - you can't use completely unlaundered cash to anonymously buy investment property, you have to launder somehow first.

currymj• 8 years ago

you’d be surprised. in the past at least there’s been far less oversight of real estate transactions than other types.

pjc504• 8 years ago

Usually this involves a set of corporate shells with opaque ownership; there may not even be a registered transfer of the property, just in shares of Mystery Holdings Corp #237 (British Virgin Islands).

jonknee2• 8 years ago

Or just find a shady real estate developer. Maybe one who has a famous name and had a reality TV show. A real greedy and corrupt type who doesn't ask a lot of questions or do much (or any) due diligence.

munk-a• 8 years ago

I don't think it's money laundering as much as money stashing. A lot of this money is flowing in from areas where the banks are unreliable, personally owning real estate is not certain (there are a preponderance of eminent domain seizures) and your control of your in-country assets is subject to the government's opinion of you.

I don't think this is laundering as much as finding a mattress to hide it under that pays back a bit on your investment. So that if you lose everything you can liquidate your hidden little pockets of real estate and maybe make a bit of cash while fleeing to where ever.

charlesdm3• 8 years ago

Pretty much this. It's also the reason why I believe cryptocurrencies will continue to do well in the coming years -- there's a need for a state independent store of wealth.

pjc504• 8 years ago

Indeed. In some ways what the UK is exporting is rule-of-law, a functioning courts system and a government that for good or ill is extremely reluctant to interfere with real estate ownership, even if it's been bought with suspect money.

The existence of a safe offshore cash stash is a benefit to some autocrats and a risk to others - it allows their underlings to escape.

elipsey4• 8 years ago

The complaint is against anonymous ownership, not foreign ownership.

I didn't notice any statement in the article opposing foreign ownership in general. Cameron states "We need to stop corrupt officials or organised criminals using anonymous shell companies."

Why does ownership need to be anonymous to perform the function you describe if not to conceal obvious money laundering? It is specualated in the article that the real owners are civil servants with billions in wealth that is inexplicable absent corruption.

ishi• 8 years ago

Here's an very clear article talking about this problem in general as well as specifically in Israel, where housing prices have more than doubled in the past decade: https://www.timesofisrael.com/do-israels-ghost-apartments-ex...

ryanwaggoner• 8 years ago

But this is all at the very high end -- you see in manhattan that houses people actually live in sell at half the $/f2 that unused "investment" properties do.

I suspect that the discrepancy in the $/sqft ranges is more about the property quality and scarcity at that range; you pay a premium for an 8,000 sq. foot duplex with a terrace that overlooks central park and has world-class finishes and amenities because there are far fewer of them than ultra-wealthy people who want them.

elipsey4• 8 years ago

It seems kind of strange to me that govt actors complain about money laundering while using their monopoly of force to protect the property rights of people (at least human people, not corporate “people”) who won’t even admit ownership. It seems like if representatives were earnest about addressing this sort of money laundering they might propose some way to stop doing that for owners of massive property holdings who won’t show themselves. In my home state, the real names and contact info for owners of small houses and residential lots are available from the tax assessors database online. That we have reporting requirements for $10,000 in cash deposits, but apparently not for office buildings and yachts seems to suggest that the wealthy are practically subject to a different system of law then the rest of us.

Has it been proposed that owners of this sort of property publicly report real ownership? There are cases where we have managed to create all sorts of de-anonomizing reporting requirements for the non-billionaires (e.g. for cash deposits). There are limitations on property rights for absentee owners (even non-anonymous ones) as with squatter’s rights.

Is it so illiberal to decline to enforce property rights for anonymous shell corporations that countries that don’t do it will be ostracized? Is it so hard to require that the real name of owners be published on a title, or just politically impossible?

lopmotr2• 8 years ago

You mean seizure of land? That's quite a risky thing to do. Plenty of now 3rd world countries destroyed themselves doing that. If people can't trust the government to enforce property rights, then how can they invest in property safely? That could then limit investing in business that owns property.

Maybe it would be safe for the economy if it's done according to a law which is not retroactively applied to existing owners. Something like requiring new owners to be personally identified before they can even be granted ownership. Then there's no seizing required.

pjc504• 8 years ago

More like "bona vacantia". Or, if the UK had a meaningful property tax, a requirement to file said tax non-anonymously.

(The UK could also do with cadastral mapping to solve a different set of problems; available only in Scotland)

elipsey4• 8 years ago

I didn't mean to propose that, but I see the problem that land is _already_ owned anonymously.

Also, we (in the U.S.) already do this in limited circumstances. For example, if I don't pay my property taxes for long enough, my property will by auctioned by the state. My tax standing is publically reported from the tax assesor's database so that my neighbors can hunt for bargains.

Perhaps legislation could add ownership reporting requirements for future purchases, or require better identity reporting for future property tax payments.

Lionsion• 8 years ago

You mean seizure of land? That's quite a risky thing to do.

Not really, it happens all the time, see eminent domain and adverse possession, etc. It's generally viewed as against public policy for land to be left unused.

Perhaps they could assess special, onerous taxes on property without a clear owner, and require said owner(s) identify themselves clearly when they're paid. If they don't, the property could be seized to pay the taxes.

baud1472582• 8 years ago

You mean seizure of land? [...] Plenty of now 3rd world countries destroyed themselves doing that.

Didn't the South African government recently decided to do that? Taking white-owned farmland without compensation? We'll see how it goes.

rwmj• 8 years ago

The UK government has no intention of making any effective changes to reveal the beneficial owners of property (although it makes a lot of noise about it to keep the "plebs" happy). Indeed after Brexit tax evasion and laundering the money of kleptocrats may be some of the few growth areas available.

If you want to find out what's really happening, I recommend reading Private Eye.

paulsutter2• 8 years ago

Apparently ownership stakes under 25% are not reported, which could be used by persons of any means to hide ownership. It’s a weird loophole that has nothing to do with the wealthy vs the little guy. It’s available to anyone willing to fill out a bunch of paperwork.

gregcoombe• 8 years ago

I wonder if changing this from a percentage to an amount (say, the $10,000 mentioned above) would close this loophole.

TallGuyShort3• 8 years ago

My state has that information available from the tax assessors office as well, however land can still be owned by a corporation and it can be slightly out of date and it's not clear who is actually responsible for the property and what it's status is if the corporation doesn't want you to find out. In my neighborhood, for example, there is some land still possibly owned by the developer, a hedge fund, and another company, but it has changed hands multiple times recently, often enough that there is little confidence in the current publicly reported documentation. They have used this to their advantage to avoid taking responsibility for HOA obligations that they are failing to meet. It takes a level of motivation to push through legal proceedings and a level of cooperation from the local government that quite simply, no one is willing to give. Even if one got that far, I'd imagine that the legal complexity of the various real estate contracts involve give them all plenty of ammunition to stall the process and suggest that somebody else may actually have responsibility for the problem until you give up. Tax assessor's information is not actually enough for the buck to stop with anyone.

jacquesm3• 8 years ago

Start squatting on it, the real owners will turn up pronto :)

EGreg• 8 years ago

You should read Progress and Poverty, a book that used to be a bestseller and well known to most intellectuals throughout the 19th and early 20th centuries, but somehow has been forgotten. It was by Henry George - whose proposal was a single land tax, and of course the point is in theory that it’s easy to see who owns what. I have a copy and the accolades on the back read like a who’s who of world leaders, thinkers and poets.

isostatic• 8 years ago

Why do people have 'property rights'? They're an artificial construct as much as government is.

If you want to monopolise an area of land, you need to pay your fair share. Perhaps for this building the land may cost society (through externalities) £2m a year, so unless that is paid (by whoever), the land gets repossessed and sold to pay the outstanding tax bill.

Far more equitable way of funding society than charging those who work for a living.

A land value taxation ensures that whoever the 'owner' is, the cost to society of that owner monopolising the land is paid.

auntienomen• 8 years ago

Mrs Hudson. Duh.

baybal23• 8 years ago

Now, court documents seen by Quartz and files leaked in the Panama Papers suggest the properties have belonged at least in part to one or more family members of Kazakhstan’s president, Nursultan Nazarbayev.

And to be precisely, his niece. When the guy was studying in Geneva, he was bragging about that left and right. My highschool classmate Olga Fedotova studied with him.

I see it a big surprise that something known even to schoolchildren out there, is such a "revelation" to the British public and law enforcement. The hearsay was around for at least 8 or 7 years.

More likely, they simply have no willpower for that

shitgoose2• 8 years ago

watch out for the door handles - wipe them clean before entering. the great and fearsome Putin is sending you some Novitchok now! and, what the hell, Olga Fedotova too!

baybal23• 8 years ago

Well, this is a thing about which local newspapers write, whom present Nurali as "an esteemed 20-years-old property magnate super duper smart wunder kinder", heck, even his own Instagram him posing in front and in that building.

There is no use for me in anonymity here. Dozens of people here and in YC known me in person. Even if I were to say that under a different acc, who I am would be instantly clear.

You see, their believe in Western politicians and bureaucrats being their playthings is so strong, that they don't even mind bragging of their London estates in the public. Heck, one of the biggest London and NYC property owner Avramovich literally said on live TV "yes, I killed that guy, what will you do?", and his London mansion still stand inviolable to UK law enforcement; UK police have not lifted a finger to do anything about him even after that.

baybal23• 8 years ago

I'll tell you a bit of to what extend does the determination of current Western political establishment is in fighting mafia:

May, and. co, and many of her predecessors gloss over terminology of rule of law, and that they can't do anything with mafia mansions unless the guilt of an owner is legally proved - this is a lie.

In both UK, and the US the executive branch has a carte blanch laws to do anything with whose ever property these days, as well as to warrantlessly wiretap them, and put them in indefinite detention.

For example, a no fly list, an OFAC SDN non-person list, EU red list. An executive branch has an unlimited power to put anybody on such list. Being put on that list effectively gives a designated person an effect of Orwell's non-personhood. A right way to deal with those mafiosos, yet have you ever seen anybody, anymuch major being put there?

TallGuyShort3• 8 years ago

> a new law ... allowing authorities to require a person to explain their stake in a property and how they came to own it

It seems to me that anybody who has the resources to have a network of off-shore shell corporations laundering money for them while owning 24% or less of all of them would have no problem providing a plausible explanation for how they came to own a particular piece of property.

spodek• 8 years ago

If they eliminate the impossible, whatever remains, no matter how improbable, must be the truth.

8bitsrule• 8 years ago

Solution seems elementary. Require all property owners (the corporate head if not private) to register properties by direct application (in a set time). If said property remains unregistered, it may -immediately- be auctioned, forfeit.

adamcharnock• 8 years ago

I believe Portugal is about to do something similar, albeit for different reasons. In their case the rural population has been urbanising. Those that remain are old and are inevitably dying. Combine this with unhelpful inheritance laws, and the result is a lot of abandoned land. This land becomes unmaintained and is a big fire risk (as per the forest fires last summer)

I understand that Portugal is going to require the registration of ownership of all rural land, and any land that is not registered will be reclaimed by (presumably) the state.

kazinator• 8 years ago

It's elementary: just eliminate the improbables, and whosoever remains must be the owner/landlord.

bartkappenburg• 8 years ago

To prevent these kind of 'situations', the Netherlands have a (soon to be implemented so it seems) law that states that it should be clear who is the "Ultimate Beneficial Owner" (UBO) [0]. The UBO is registered and viewable for everyone. No more hiding through obfuscation :-)

[0] https://www.nautadutilh.com/en/our-expertise/special-topics2...

chrischen2• 8 years ago

Seems like the solution if too many unwanted foreign parties are holding your assets is to depreciate your assets.

For whatever reasons houses are considered appreciating assets, even super old ones.

kspaans2• 8 years ago

It's the land underneath that appreciates, not the structure of the house on top of the land.

chrischen2• 8 years ago

Right, so there needs to be incentive structure to force property owners to make the most of the land. If the house is old and crappy, then taxes should force them replace the building with something more useful/more dense in order to offset taxes.

microtherion• 8 years ago

An unsolved mystery? Someone should get Sherlock Holmes on the case!

The unsolved mystery of who owns 221b Baker Street

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