Property Fraud: Coming to a Home Near You
Published: 28 April 2015
We all think that being a victim of fraud is something that happens to other people: a remote tragedy that affects only a minority, yet with the Land Registry paying out over £26million in claims for fraud last year the risk of being a victim of property fraud is greater than ever.
We may fear being burgled and having our possessions stolen but what if the thief actually steals your house - and we don’t mean the roof tiles, lead and or other removal object? The legal title to your house can be stolen and for most people the legal title to a property is their most valuable possession.
In the last 5 years, the Land Registry has prevented frauds on properties amounting to more than £66 million. In a recent case, two fraudsters managed to pocket £50,000 by selling an empty home they didn’t own. The fraud was spotted before the change of title could be registered but the fraudsters got away with the money and are still wanted by police.
How do you know if you are at risk?
You’re more at risk of fraud if:
- your identity has been stolen,
- you rent out your property,
- you live overseas,
- the property is empty
- the property isn’t mortgaged,
- the property isn’t registered at the Land Registry.
How can you prevent a fraud?
1) Track changes to the register
* You can sign up to get property alerts from the Land Registry if someone applies to change the register of your property, eg someone tries to use your property for a mortgage.This won’t automatically block any changes to the register but will alert you when an application against your title is made so that you can take action.
* You can get alerts for up to 10 properties and there’s no fee.
2) Put a restriction on your title
* You can stop Land Registry registering a sale or mortgage on your property unless a conveyancer or solicitor certifies the application was made by you.
3) Update or correct contact addresses
* You can register up to 3 addresses (including email and non-UK addresses) with the Land Registry for each property.
* To change your contact details or those of other owners or agents send a request to update registered owners’ contact address.
4) Property Alerts
* The Land Registry have introduced a new scheme called Property Alert. which is an award winning free property monitoring service aimed at anyone who feels a registered property could be at risk from fraud.
* Once you have signed up to the service, you will receive email alerts when certain activity occurs on your monitored properties, allowing you to take action if necessary.
An example of how these measures can help involves a man who rented out his property using letting agents while he lived overseas. His letting agents were approached by someone claiming to have bought the property. This was a surprise to them, so they contacted Mr Q who then contacted the Land Registry’s property fraud line.
Upon investigation, it was found that an application to transfer Mr Q’s property into the name of a buyer had been received. A staff member also spotted discrepancies between Mr Q’s signature and previously scanned documents. A letter was sent to the buyer’s solicitor requesting confirmation of the steps taken to verify Mr Q’s identity.
Mr Q’s solicitor also contacted the Land Registry to confirm that he had known the family for over 20 years and that Mr Q had not sold his property. He referred the matter to the police on Mr Q’s behalf.
As the Land Registry had not received sufficient evidence from the buyer’s solicitor in respect of the signature verification for Mr Q, the transfer application was cancelled and the sale wasn’t registered.
The fact that Mr Q was not a victim of fraud was in part due to luck however, if Mr Q had signed up for Property Alert he would have received an email when the Land Registry first received notification that a transfer of ownership would be arriving. He would then have been informed at the beginning of the attempted fraud of the fraudsters’ intentions and would have been in a position to prevent it from the start.
Fletcher Day can help – let us review your property portfolio to ensure you stay one step ahead of thefraudsters. With our help, your property can remain in your safe hands.
The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.