How to protect yourself against property fraud

Property fraud is on the rise and it affects both homeowners and buyers. Here's how to protect yourself.

House with padlock

What is property fraud?

Property fraud is when someone illegally attempts to gain ownership of a property by either:

  • impersonating the registered owner of the property or;
  • by using forged documents to transfer the property into their own name.

Once fraudsters acquire ownership of a property, they will then either sell it or remortgage it and steal the money.

Types of property fraud

Property fraudsters are becoming increasingly sophisticated and property fraud can take many forms, including when:

  • A property is sold by someone who is not the legal owner.
  • A property buyer is scammed into transferring money to the fraudster’s bank account.
  • A property investment opportunity is too good to be true.
  • A quick sale company promises to buy your home quickly, then dramatically drops the purchase price at the last minute.

Read more

Selling through a quick sale company? What you must know

Which home owners 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 can be downloaded from HMLR if the property was purchased or mortgaged from 1998 onwards.

How can a property be sold by someone who is not the legal owner?

HMLR’s online service can also be used by fraudsters to find out who owns a property, along with the owner’s correspondence address.

There may even be a copy of the owner’s signature on a document freely available at HMLR.

The fraudster might then be able to intercept mail intended for the legal owner. The fraudster might be a tenant of the property or could possibly intercept mail delivered to the common parts of a block of flats.

With access t the right documents, the fraudster may be able to adopt the identity of the owner. It may then be possible for the fraudster to sell the property without the legal owner being aware.

How can I protect myself against property fraud?

Check that your property is registered at HMLR. If your property is not registered and you fall victim to property fraud, any possibility of compensation will be greatly reduced. A conveyancing solicitor will be able to assist with the registration process if required.

You should then check that your registered contact details are up to date on the HMLR database. If there are any future applications to sell or transfer ownership of your property, HMLR would contact you first.

The following steps can then be taken to help protect yourself against being a victim of property fraud:

Sign up to the FREE HMLR Property Alert Service

The HMLR Property Alert Service offers free property alerts that notify homeowners of any official searches or applications received against their property.

If there is any activity on your property such as an application to change the registered owner, HMLR will contact you via email.

You can monitor up to 10 properties at a time, free of charge, and an individual property can be monitored by more than one person.

HMLR will not automatically block activity on your property via this service, but the email notifications will enable you to take action if necessary.

Put a restriction on your property's title

You can also apply to HMLR to have a restriction placed on the title deeds of your property.

A restriction will prevent the HMLR from registering a sale or mortgage on your property until your nominated conveyancing solicitor has certified that the application was made by you.

If you live in the property in question you will be charged a fee of £40 to put a restriction on your title. If you own the property privately and do not live there, the service is free.

Safeguard your email against hackers

Email hacking is a method used by fraudsters to intercept emails between a home buyer and their conveyancing solicitor.

With access to the home buyer's email, the hacker will alter bank details referred to in the correspondence, so that the purchase funds are transferred by the buyer to the fraudster’s account.

You can protect yourself by:

  • Cross-checking any bank details sent to you via email with any sent in the post. If the bank details differ, call your solicitor and confirm that the bank details are correct.
  • If you are informed via email that the solicitor's bank details have changed, query this with your solicitor.
  • 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.

Lawyer Checker

Lawyer Checker is a risk management service offered to conveyancing solicitors. The service allows solicitors to check whether another solicitor or individuals bank account details are correct.

If your email or your solicitor's email account is hacked and the fraudster manages to change the account details in an email, the Lawyer Checker search should pick up the disparity before any funds are transferred.

This service is usually charged as a nominal disbursement (approx. £10). Most solicitors now offer this service but if yours does not, ask why.

Property investment scams

These scams take various forms, including:

  • Land banking: Land offered at an inflated price, with the promise that it will bring a huge return when planning permission is granted. In reality, the land may never be granted planning permission, or may not even exist.
  • New build property abroad: Investing in holiday lets before they have been built.
  • Buy to let scams: A company will invite you to invest in rented properties with the promise of a regular rental income. The properties may turn out to be empty, or in disrepair.

Does it sound too good to be true?

If it does, it probably is.

Carry out plenty of due diligence before you consider investing. View the property or land and find out whether planning permission has been granted if applicable. If you are looking to invest in a property development, request detailed plans for the site.

Does the company offering the investment opportunity have a registered address and landline number?

Always seek independent legal advice before investing your money.

What to do if you fall victim to property fraud

If you think you may have been a victim of property fraud, call the HMLR property fraud line on (+44) 0300 006 0478 (Monday to Friday, 8:30am to 5pm), or email reportafraud@landregistry.gov.uk.

Alternatively, you can contact Action Fraud.

Your next step

If you are buying, selling, remortgaging or transferring equity in a home, we can help you find an expert conveyancing solicitor.

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Gaynor Haliday, Legal researcher

Author:
Gaynor Haliday, Legal researcher