Buying a property is usually the biggest expense of people’s lives. It’s undoubtedly a stressful experience for all involved, however once completion has happened and your title registered with the Land Registry you can relax knowing your home is yours. Or so you might have thought.
Sadly, your home or other property can be targeted by fraudsters in the same way as other items of value and just like other types of fraud, it appears to be on the rise. Even more alarmingly, you might not even know they’ve done it until it’s too late.
How can property title fraud happen?
The only record of who owns what property in England and Wales is HM Land Registry. HM Land Registry maintains the Land Register which contains more than 26 million titles showing evidence of ownership for more than 88% of the land mass of England and Wales[1]. The register records any ownership changes, mortgages and leases that affect it. In order to steal or defraud someone of their property, it is therefore necessary to deceive the Land Registry that the transaction is a genuine one. The methods used to perpetrate this type of fraud are many and varied but predominantly involve some form of identity theft.
Identity theft
HM Land Registry does not generally verify identity documents itself, it relies on other professionals such as conveyancers to do so.
The types of identity theft used to fraudulently obtain property can vary and may involve anyone in the property transaction for example owners, buyers, borrowers, lenders or conveyancers.
Most commonly criminals will use false identity documents to impersonate the current owner of the property, instructing solicitors/conveyancers that they intend to sell the property. The use of false ID documents may mean that they are able to pass the ‘know your client’ checks that solicitors are required to undertake, particularly if the photograph of the ID document matches the face of the person they are instructed by.
The fraudsters may already have ready ‘buyers’ (often part of the same criminal organisation) and so it is a very quick transaction. The transfer documents, subsequently filed with the Land Registry, will have been approved by a solicitor based on those false identity documents. The property may then be sold on quickly to a genuine purchaser. Alternatively, the buyer may also be duped by the fraudsters and purchase the property in good faith.
There have been some reports of fraudulent estate agencies being set up and marketing properties that are not genuinely for sale where prospective buyers have been defrauded out of their property purchase funds[2]. This may occur when a tenant purports to be an owner and lists the property on a fraudulent estate agent website.
And in other instances the aim may not be to physically take possession but most likely transfer the title and later apply to mortgage the property leaving the genuine owner unknowingly in default of their mortgage payments with the criminal having taken the money[3].
Impersonation of conveyancing firms
In more elaborate and organised offending, there have been some instances of persons going as far as impersonating legitimate solicitors firms or licenced conveyancers with the use of fake letterheads, fraudulent websites and email addresses[4].
What types of property are most at risk?
Properties that are most at risk of being targeted in this way are:
- Empty
- Rental properties
- No mortgage
- Where the owner lives overseas
- Properties owned by sole individual or company with only one Director
- Properties not yet registered with HM Land Registry
What can you do to prevent it happening?
It is possible to register a Restriction on the title register with the Land Registry which prevents any sale or mortgage being registered on the property unless a conveyancer or solicitor certifies the application was made by you. There is still however a risk that the certification could be falsified if the criminals are aware and using false identity documents.
You can also sign up to the Land Registry Property Alert service where you will receive an email when any official searches and applications are received against the property you want monitored.
If the property is empty or rented out, make sure that the address the Land Registry hold for you is your current address rather than the address of the property to ensure that any correspondence they send out is received by you.
Investigating frauds of such nature can be complex and technical. Depending on the circumstances of the fraud it may be possible to obtain compensation from the Land Registry and/or prosecute the perpetrator. EMM has specialist in house investigators and lawyers well versed in such investigations. If you think that you have been a victim of a property title fraud contact us on 0207 583 8392 to see if we can assist.
Fani Gamon
[1] https://www.bbc.co.uk/news/uk-england-cambridgeshire-63571910
[2] https://www.gov.uk/government/organisations/land-registry/about
[3] https://www.titleguardian.com/cases/fraudsters-stole-my-ps850-000-home
[4] Nationwide Building Society v Davisons [2012] EWCA 1626 and Lloyds Bank v Markandan & Uddin [2012] EWCA Civ 65
