Property fraud is when someone attempts to gain ownership of a property by impersonating the registered owner, or by using forged documents to transfer the property into their own name. Once fraudsters acquire ownership of a property, they will sell it, or raise a mortgage on it.
According to Land Registry figures released in 2018, property hijackings are on the rise. 279 fraudulent registrations with a combined property value of £133.4 million were barred by the Land Registry, although the value of successful frauds have more than tripled in the past few years – from £7.2m in 2013 to £24.9m in 2017. The rise in successful crimes may be attributable to an improvement in available technologies.
This is partly due to the Land Registration Act, which was introduced in 2002 with the aim of cutting out an old-fashioned paper process. Whilst many of the reforms have been beneficial, an open electronic register has encouraged fraudsters to take advantage of the system.
Empty houses or properties let to tenants are particularly vulnerable. Criminals will typically rent a vacant property and begin to intercept the landlord’s post before posing as the true owner and selling the house to a cash buyer. Often the Land Registry will be the first to recognise the crime, by which time it is usually too late. A property development company, Dreamvar, purchased a London property from a seemingly legitimate seller for £1.1m. It was only after the firm had already begun refurbishment work that the scam came to light.
TYPES OF PROPERTY FRAUD
Property fraud can come in many forms, including:
When a property is sold by someone who is not the legal owner.
Property buyers being scammed into transferring money to the fraudster’s bank account.
Property investment opportunities that are too good to be true.
Quick sale companies who promise to buy your home fast, then dramatically drop the purchase price at the last minute .
WHICH HOMEOWNERS ARE MOST AT RISK?
According to the Gov.uk website, you are more vulnerable to property fraud if:
You have had your identity stolen
Your property is rented out
You live overseas
Your property is empty
Your property is mortgage-free
Your property is not registered with HM Land Registry (HMLR).
Digital records of your property’s title will be downloadable from the Land Registry if it was bought or mortgaged from 1998 onwards. You can check to see and download details of your property here.
SO WHAT CAN YOU DO?
Be careful about identity theft.
Due to the Money Laundering Act 2018 clients must produce their identity documents to their solicitor when buying or selling a home. At Graham Smith Property Lawyers we like to meet the clients in person, in our office, to verify their identity using original ID documents as we consider sending ID documentation via email high risk.
With modern technology and computer software, scanning any form of document whether it be passport, drivers’ license, bank statements, then sending them via email has its dangers.
Identity theft is a very serious problem, and can lead to all sorts of fraud. Once fraudsters have got a scanned copy of your passport, then can manipulate image and details to create a very similar, if not an identical copy. Your identity is one of your most valuable assets. If your identity is stolen, you can lose money and may find it difficult to get loans, credit cards or a mortgage.
As for what a person can do with your now with your stolen identity, this is enormous.
Your name, address and date of birth provide enough information to create another ‘you’. An identity thief can use a number of methods to find out your personal information and will then use it to open bank accounts, take out credit cards and apply for state benefits in your name.
Your stolen identity can be used to launder money and implicate you in crimes which you did not commit, like property fraud. It can also be used to create fraudulent companies.
Your identity could be sold on to third parties so they too can implicate you in illegal transactions
Your passport, drivers’ license and bank statements, are a very powerful documents, that is why we take great care in protecting you.
SAFEGUARDING AGAINST EMAIL HACKING
Email hacking is a method used by fraudsters to intercept emails between a person in the process of buying a property and that person’s conveyancing solicitor. The purpose of intercepting the emails is to alter bank details referred to in the correspondence, so that funds are transferred by the buyer to the fraudster’s account.
Here is how to protect yourself:
Cross check any bank details sent to you via email with any sent in the post. If the bank details differ, ring your solicitor to query them.
If you are told via email that bank details have changed, query this with your solicitor.
Agree terms with your solicitor at the start of the conveyancing process as to how changes in bank details will occur. (In person is ideal.)
Do not use public Wi-Fi when exchanging emails regarding your property purchase; public Wi-Fi can be easier to hack into.
Use strong passwords on your email accounts and ensure you have anti-virus protection on your devices.
IF YOU RENT OUT A PROPERTY OR OWN A HOLIDAY HOME, make sure that the Land Registry has your up to date correspondence address, not the address of the property. You can register up to 10 addresses with the Land Registry including an email address.
OBTAIN A RESTRICTION AGAINST TITLE. Whether you live or do not live at the property you can register a ‘restriction’ against the title. This means that no sale or re-mortgage of the property is to be registered without a certificate signed by a conveyancer, who is satisfied that the person who executed the document is the actual owner. There is no fee for this if you do not live in the property, but if you live in the property the registration fee will cost £40. Obtaining a restriction against title might be something worth considering while you are going through the conveyancing process.
SIGN UP TO THE LAND REGISTRY'S FREE PROPERTY ALERT SERVICE. You will receive an email if anyone attempts to deal with your Property Title. Use the following link
propertyalert.landregistry.gov.uk/propertyalert/accountcreation/
BE ALERT - Be alert if you receive any correspondence purporting to be from an agent or a solicitor relating to the sale of your property. Do not assume it is simply a mistake and ignore it. Contact the sender to find out why they are writing to you.