How to protect yourself against property fraud
Anyone who owns a property or is in the process of buying one could fall victim to property fraud. Here is how to protect yourself.
What is property fraud?
Property fraud is when someone attempt 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.
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 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 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.
How can a property be sold by someone who is not then legal owner?
HMLR’s online service can be used discover 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 may be able to intercept mail intended for the owner – perhaps via the common parts of a building or they may even be a tenant.
If the fraudster is able to adopt the identity of the owner, it may be possible to go all the way through then property sale process without then genuine owner ever being aware.
How can you protect yourself from property fraud?
- Ensure your property is registered with HM Land Registry. If your property is not registered and you fall victim to property fraud, any possibility of compensation will be greatly reduced.
- Check that your contact details are up to date on the Land Registry. This will ensure that you can be contacted should there be any applications to sell or transfer your property.
The FREE Land Registry Property Alert Service
HM Land Registry offer free property alerts which notify home owners 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, the Land Registry will contact you via email.
The Property Alert Service allows you to monitor up to ten properties at a time, free of charge, and an individual property can be monitored by more than one person.
The Land Registry will not automatically block activity on your property via this service, but the email notifications will enable you to take action if necessary.
Putting a restriction on your title
You can apply to the Land Registry to have a restriction placed on the title deeds of your property.
The restriction will prevent the Land Registry from registering a sale or mortgage on your property until your 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.
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.
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, for example your (or your solicitors’) emails are hacked and the fraudster manages to change the account details in an email, the Lawyer Checker search should pick this up.
This service is usually charged as a nominal fee (approx. £10). Most solicitors now offer this service – if yours does not you should ask why.
Property investment scams
These scams can come in the form of:
- 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 builds 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 then it probably is.
Do 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 development, request detailed plans for the site.
Does the company offering the investment opportunity have a registered address and landline number?
It is prudent to take 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 HM Land Registry property fraud line on 0300 006 7030 (Monday to Friday, 8:30am to 5pm), or email email@example.com.
Alternatively, you can contact Action Fraud.