Exactly. Property and title laws should apply. (Score 1)

There was a court case that ruled that domains are property, in, I think, Virginia. That might be used to impose more obligations on NSI under property law. This will take a good lawyer.

IMO, the new owner does not have clear title to the domain name. Consider this example:

Joe agrees to sell me his car.

I give Joe the money. We go to the registry of motor vehicles with the title, wait in line for 2 hours, deal with a surly and incompetent clerk, and pay a fee for transfer of the title.

Instead of correctly processing the paperwork, the registry then puts the title on a bulletin board in the lobby.

A vagrant comes and takes it off the bulletin board, goes inside, and registers Joe's car in the vagrant's name.

The vagrant will not have legal ownership (clear title) of the car. The transaction is not valid.