Property Fraud – risk and solutions
Increasingly sophisticated criminals are taking advantage of weaknesses in our legal system by assuming the identity of a property owner in order to sell that property and take the proceeds. Your property is probably the most valuable asset you own, so it’s important to protect it from the risk of property fraud.
There has been a marked increase in cases where fraudsters have either used a forged document to transfer a property into their own name or have impersonated property owners and tried to sell or mortgage properties. Once they have raised money by mortgaging or selling the property, they disappear leaving the true owners to deal with the consequences.
Recorded incidents of forged transfers and charges are not restricted to individuals; corporate owners such as landlords are targeted too. Reportedly, there is little assistance for victims of property fraud, with many cases not investigated by the police, due to lack of resources or viable lines of enquiry.
With little help from relevant authorities, victims of fraud are seeking recompense from other avenues. In a recent landmark ruling, solicitors were found liable for breach of trust after their client purchased a property from a tenant posing as the owner, even though the firm involved had acted honestly and innocently. They were held responsible for a loss of £1m.
Tenanted, unoccupied or mortgage free properties are known to be particularly vulnerable.
Counter-fraud avoidance measures
To reduce the risk of becoming a victim of property fraud, the following steps can be taken:
- Land Registry has a free Property Alert Service. They will notify you of certain applications affecting your registered property, such as for a new mortgage or change of ownership. You can monitor up to 10 registered properties in England and Wales. You don’t have to own the property, so you could monitor a property on behalf of the legal owner.
- Make sure the property is registered. Innocent victims of fraud who suffer a financial loss as a consequence, may be compensated.
- Once registered, have up-to-date contact details on the title register so they can reach you easily – up to three addresses can be used including email addresses or an address abroad.
- Private owners and companies who feel their property might be at risk can have a restriction entered on their title register which is designed to help prevent forgery.
Andrew Nicholson is managing partner and head of the Property Team at Barker Gotelee Solicitors.
A version of this article appeared in the East Anglian Daily Times, 21st June 2017.