As the Land Registry is a public register unfortunately many people are unwittingly finding themselves the victims of fraud associated with their ownership of property. There have been many high profile cases in the news where property has been fraudulently sold with the true owners completely unaware until some time later when the fraudsters have long since made off with the fraudulent sale or mortgage proceeds.
The perpetrators may seek to fraudulently sell the property or take out a mortgage against it and make off with the proceeds.
Fraud may be committed in various ways, for example:-
- Inter family or associate frauds which may be carried out by family members, friends or partners;
- Third party frauds where tenants, or those who have access to tenants, are able to divert post to perpetrate the fraud;
- Third party frauds that constitute ‘organised crime’.
Whilst to some degree all properties are potentially susceptible to being the subject of a fraud, there are certain categories of owners and properties that are more at risk from fraudulent activity such as:-
- elderly owners who are in hospital or have moved into a care home (such properties are often free from a mortgage which makes the fraud easier);
- owners who live abroad;
- owners who no longer live in the property and there was an acrimonious break up with a partner;
- owners who have already been the victim of identity fraud;
- personal representatives who are responsible for the property where the owner has died;
- unoccupied properties, whether residential or commercial;
- tenanted properties;
- high value properties without a mortgage;
- high value properties with a mortgage in favour of an individual living overseas;
- properties undergoing redevelopment.
Personal Representatives of an estate are under a duty to protect and preserve the estate on behalf of the beneficiaries. Failure to do so could render the personal representative personally liable for any loss caused to the estate. Therefore, personal representatives should be mindful of the possibility of property fraud and take reasonable steps to protect a property from being exposed to such fraud. In most cases, the property is usually the biggest asset of the estate and the need to protect it is an important consideration.
The same applies to attorneys who have been appointed under a Power of Attorney or deputies appointed by the Court of Protection.
What can you do to protect yourself/your property?
Unfortunately fraudsters are always finding new and ingenious ways to commit a fraud, however there are certain things you can to reduce the risk of this happening to you:-
- Keep your address for service up to date – See Land Registry Public Guide 2 “Keeping your address for service up to date” https://landlords.org.uk/sites/default/files/librarypdfs/1/Land_Registry/public_guide_002.pdf. Amending your address is simple and free.
- If you are intending to leave your property empty for a significant period of time, such as for redevelopment purposes you should consider registering an alternative address for service.
- Register a restriction which prevents dispositions without the consent of a solicitor. This can be registered quickly and simply is highly recommended.
- Sign up to the Land Registry Property Alert Service https://propertyalert.landregistry.gov.uk/.