Protect your property from fraud

A recent case, in which a mother and daughter were able to conspire to commit fraud, highlights this worrying trend and warns property owners to be more vigilant.

Example property fraud case

In 2014, a mother and daughter not only conspired but were able to take monies by fraudulent means. Having secured the tenancy on a property and following the death of the legal owner, the mother was able to steal her identity.
With her new identity, the mother successfully applied for and secured a significant bridging loan using the property as collateral. Her daughter was pivotal to the deception and was living in Dubai, meaning the mother could publish a bank account there in order to store the funds.

With suspicions being raised by the Land Registry based on activities surrounding the property, the Metropolitan Police investigated and were able to secure a prosecution against both parties under s1 Criminal Law Act 1977. The proceeds of the fraud, however, were never recovered.

How was the fraud able to occur?

Key points, in this case, led to the fraud being able to occur. These included:

• the property was rented out;
• the only contact address for the owner was the property address;
• the property was mortgage free;
• the property was high value.

How to avoid property fraud

You can take steps to safeguard against property fraud, these include:

1. Ensure the property is registered. There are still many unregistered properties in England and Wales that fraudsters could try and claim against.
2. Consider voluntarily registering the property at the Land Registry.
3. Make sure the Land Registry has up to date contact details. Out of date contact details means that correspondence can be inadvertently sent to fraudsters and intercepted, enabling them to pose as the legal owner.
4. Consider applying to the Land Registry for their free property alert service. This means that if a fraudster does try to make a claim or change the property title, they will alert you. Time is of the essence as titles can pass if owners do not act quickly.
5. Consider entering a restriction on the title which requires a solicitor or conveyancer to confirm. If you live at the property, there is no fee, if the property is rented out or empty a small fee of £40 is required.

Why you should protect yourself against property fraud

With owners believing that their properties are protected, following the steps above can help stop this type of fraud.

Opportunists are able to impose real owners, which means they are able to inadvertently satisfy security checks. If contact details are outdated, this provides a window for fraudsters to take control of the property. If the property is mortgage free or empty for long periods, as seen in the example case, fraudsters are benefitting.

With alerts only being raised by astute members of staff at the Land Registry, with heavy workloads, some fraudsters are slipping through the net. With two simple methods offered by the Land Registry to combat this issue, even if a small fee has to be paid, not only can owners have peace of mind, but this type of fraud can be stopped. Don’t run the risk of having your property potentially being sold from underneath you without you even being aware. Make sure you have taken the steps to avoid property fraud.

For further information and advice, please contact our Residential Property team.

This content is correct at time of publication