Your property is probably the most valuable asset you own. It is therefore very important that you do everything within your power to prevent it from becoming the object of property fraud.
As properties are at greater risk of being targeted when they are vacant, one crucial measure is to avoid leaving the property empty. It is also vital to protect against identity theft, since this is one of the main ways in which you could become a victim of property fraud.
What is property fraud?
Property fraud is when criminals target a property, effectively stealing your home by taking the legal title to it, pretending to be you and then selling or mortgaging it.
Risks of property fraud
You are at greater risk of property fraud under the following conditions:
- The property is empty i.e. it was bought to let, or the owner is abroad or in a care home
- There is no mortgage on the property
- The owner’s identity has been stolen
- The property is not registered with the Land Registry
- There are family problems involving the property
- There is a relationship breakdown and one partner tries to mortgage the property without the other person’s consent
- A relative dies and a family member tries to sell the property without giving someone their proper share
Types of property fraud
Property investment fraud is when you are lured into investing in a property development scam, with the fraudster often hiding behind an agent or company. Among the most common versions of this type of fraud are holiday homes abroad which end up never being built. One should also be very suspicious of land banking, which is the practice of aggregating small plots of land to sell at inflated prices on the promise that the value will rise sharply once planning permission is granted. It may be possible to sue the solicitor acting for the agent and reach a settlement without issuing proceedings, since some property investment fraudsters use a corrupt solicitor to lend their scheme credibility.
Identity fraud is when the criminal poses as the property owner and sells the property without their knowledge. The buyer loses their money when the Land Registry halts the transfer or, if the Land Registry does not detect fraud, the owner could lose their property.
Mortgage fraud is when criminals exploit lending or conveyancing systems, often misrepresenting or omitting information on a mortgage loan application to secure a larger loan. Examples include:
- Misrepresenting income or property value to obtain higher loans
- Using fake identities
- Taking out numerous mortgages on a single address by manipulating Land Registry data
- Changing the deeds without the owner’s knowledge to allow the sale of a property
How to protect against property fraud
It is essential that, as far as possible, you avoid leaving the property empty for an extended period.
You can sign up with the Land Registry to receive property alerts if someone applies to change the register of your property, such as attempting to use it for a mortgage. Although this does not automatically block such changes, it is a useful and free notification service .
You can also place a restriction on your title in order to prevent the Land Registry from registering a sale or mortgage on your property, unless a solicitor or conveyancer certifies they have confirmed the identity of the person who signed the deed. If you are a company or you do not live at the property, it is free to request such a restriction; if you live at the property the cost is £40.
You should also register your property with the Land Registry, which makes it more likely that you will be compensated financially should you become the victim of property fraud. You should also keep your contact details at the Land Registry updated, so that they can easily get in touch.
It is also a good idea to obtain practical guidance via the Land Registry property fraud helpline.
Do you need a solicitor?
As a specialist real estate litigation law firm, we are experts in all aspects of contentious residential and commercial property matters. In particular, our solicitors are highly experienced in advising property owners on property fraud cases. In the case of property investment fraud, we can help you to sue the solicitor acting for the fraudster. More generally, we can help you take action to prevent property fraud, claim compensation should fraud occur, and take legal action against the fraudster.