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Don't become a victim of property fraud!

View profile for Harvey Gibbs
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Perhaps now is the time for a reminder about the risk of becoming the victim of a property fraud. This is particularly so given that since March 2020 many of us in the property industry have been working from home, with most communications with clients and other conveyancers being by way of e-mail and telephone.

Property fraud is where criminals attempt to “steal” your property.

Surprisingly, I find that many clients are not aware of the problem. With property values continuing to increase significantly a house or apartment is usually by far the most valuable asset that people own. It is attractive to criminals as it can be sold or mortgaged to raise substantial sums of money. Since 2009, the Land Registry has prevented the registration of fraudulent transactions involving properties worth more than £74 million. However, it should not be assumed that the Land Registry is a safety net. Once a fraudulent transaction has been completed there will be substantial losses and costs to the innocent parties even if the Registry is able to prevent registration of the transaction.

You should be particularly concerned if:

  • You do not live at your property (if it is let or is vacant, for example)

  • You live overseas

  • You are a sole owner and/or there is no mortgage on the property

  • You are the personal representative of a deceased owner

  • Your property is not registered at the Land Registry

  • You are buying a property and it is a private sale (i.e. no estate agent is involved)

Property fraud can take a variety of forms, but it usually centres around fraudsters who, using false or stolen identification documents, impersonate the parties who might be involved in a property sale, including the conveyancers.

Examples are:

  • Where a “buyer” makes an offer for a property, starts the conveyancing process but withdraws before exchange of contracts. They then sometime later use the information that they gained about the property from the abortive transaction in order to carry out a fraudulent transaction (such as a mortgage or sale).

  • Where a “seller” impersonates the true owner of a property in order to sell it or raise cash by way of a mortgage.

  • Where the fraudster pretends to be a conveyancer or impersonates a genuine conveyancer. They subsequently receive the sale or mortgage funds from the transaction and then steal them by way of a transfer to the fraudsters account, which is likely to be overseas.

If a property fraud is successful, the consequences for the true owner of the property can be devastating, and not easy to resolve.

There are however steps that you and conveyancers can take in order to reduce the risk of, or to expose, an attempted fraud:

  1. If the title to your Property is not already registered at the Land Registry then you should seriously consider making an application to the Registry for the voluntary registration of your title. The Land Registry encourages all property owners to register and offers a reduced application fee. There are other benefits of registration and it is well worth the exercise. Your solicitor will be able to make the application for you.

  2. Once your property title is registered, or is already registered, with the Land Registry you can:

    1. 1. Set up a “Property Alert”. You would then be contacted by the Land Registry in the event that the Registry was to receive an application relating to your property, If you were not aware of the application you could then take steps in order to prevent the application from being completed. This is a free service which is offered by the Land Registry and you can set up the Alert on up to ten properties. It is important to understand however that, having received notice of an application, the onus would be on you to take action.

    2. 2. Register a “Restriction” on your title register at the Land Registry so that there can be no dealing with your property unless a conveyancer or solicitors certifies that the dealing is by you.

    3. 3. Make sure that your address for service in the title register at the Land Registry is kept up to date, as this is the address that the Land Registry will use in the event that they need to contact you. You can include an e-mail address in addition to a postal address.

  3. If you are buying a property you should ask your conveyancer to confirm that they have verified the seller’s conveyancers.

In the unfortunate event that you think you have been a victim of property fraud you should contact the Land Registry’s Property Fraud Team immediately. In addition, you may also wish to report the matter to Action Fraud (the National Fraud and Cyber Crime Reporting Centre) and take advice from your own legal advisor.

For advice about protecting yourself against the risk of property fraud, please contact me on 02476 999399 or another member of the Feldon Dunsmore team.

Author: Harvey Gibbs

04 December 2020