Derek Inkpin, a partner in our property department, takes a look at property fraud, highlighting two real-life cases that should make any home owner take note.
The computerisation of our world has changed lives beyond recognition from that understood by our grandparents. However as we all know it comes at a huge price because of fraud perpetrated on the internet.
Fraud threatens each of us, our businesses and the economy upon which we rely. Fraudsters are attracted to property because it can be sold and mortgaged raising money for their dishonest activities. Take two scams as examples:
- Your identity is stolen by an individual or couple. They go to a solicitor with your stolen ID and ask that it is transferred to their alleged son-in-law. Before the scam takes place the criminals have discovered that your property is mortgage-free making it an ideal target. Once transferred they obtain a mortgage secured on your property for £325,000. You then discover what has happened whilst you are living in your house. Once notified you feel sick. Sounds fanciful? This happened. The criminals disappeared. Apart from the shock and worry to the house owner in that case leading to yet another claim on the Land Registry compensation fund the worry this caused is something with which we can all empathise. Millions in compensation has been paid by the Land Registry since Land and Charge Certificates (being proof of ownership) were abolished in 2003.
- Mr and Mrs Jones were the joint owners of their property. After they had died the property remained empty for months whilst their family sorted out probate and the sale of their property. One day a family member passed the house and saw a “Sold” sign outside. The estate agent was contacted and confirmed that contracts were close to being exchanged. The seller’s true identity was unknown but false ID had led to the estate agent and the instructed solicitors acting for a fraudster.
Many other examples exist because dishonest people think of many ways of selling or mortgaging property unbeknown to the true owners or their families.
So what can be done? The Land Registry has a service called “Property Alert.” If you register for this service if a fraudster tries to sell or mortgage your property you will be alerted so that you can take swift action to prevent it happening.
Vulnerable owners such as the elderly without a mortgage or empty property owners can apply to the Land Registry to enter a Restriction on the Register preventing a sale or mortgage from being registered without a certificate being provided either by the owner or better still their solicitor.
If you are a buy-to-let landlord but have moved since you purchased the property make sure you inform the Land Registry of your new address so you can be contacted easily.
As property owners we are all vulnerable if a property is left empty, tenanted, or you no longer have a mortgage secured on it. Thankfully fraud cases are rare but they are increasing. Although the Land Registry continues to develop its counter-fraud measures we must remember that challenges relating to online conveyancing continue to generate new scams and we all need to be vigilant to ensure we protect our most valuable asset.