[dcolkitt]

A judge is a lot more likely to twist the language in a legal contract than he is to outright appropriate property that's not even being legally transferred. The latter would be immediately reversed by an injunction in a higher court, and the lower judge would be remanded, possibly removed from office.

I can't find a single instance in American history of real property being outright appropriated by a court outside eminent domain.

[Imnimo]

But won't there also be a legal contract in the NFT case, defining who is allowed to live in the house, what their obligations are, and under what circumstances they can be evicted?

[dcolkitt]

No. There's only an LLC who's bylaws state that the managing member is whoever the holder of record on the blockchain is. Effective transfer of the property is affected purely in crypto space through transfer of the NFT, possibly within a smart contract.

(Of course the smart contract can be coded with the option to defer to a human arbitrator in the case of dispute, but that doesn't even have to be a duly appointed judge. It's just an address on the blockchain that we point to. Almost certainly we'd pick an arbitrator that respects crypto title.)

The only way for the fiat legal system to pierce this scheme is to either invalidate the LLC in the Wyoming court system or to directly appropriate title to the real property from the LLC in the local county. Both are pretty unlikely.