How to Protect Your Property From Fraud
Fire, flooding, extreme winds. All these things spring to mind when you consider the potential threats to property. But there are other threats you might not have considered, and property fraud is one of them.
It’s a crime that deprives rightful owners of their property and robs unsuspecting purchasers of their cash.
What is property fraud?
Property is usually the most valuable asset people own. It can be sold and mortgaged to raise money and can therefore be an attractive target for fraudsters. There are several types of fraud. The most common is where criminals attempt to sell or mortgage a property by impersonating the owner. Criminals often target properties where there is no mortgage and the owner lives elsewhere.
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Criminals also target properties that are in the process of being bought and sold. By hacking, phishing or confidence trickery, fraudsters may intercept the money that is being transferred from buyer to seller as it passes through the hands of conveyancing lawyers.
Am I at risk? Who is most at risk from property fraud?
Anyone who owns a property or is in the process of buying a home could become a target of a property fraud scam. However, some owners are more at risk than others. Figures show that fraudsters are more likely to target mortgage-free properties, empty homes, properties being refurbished, or those occupied by tenants rather than the owner. Criminals are also more likely to target properties that are not registered with Land Registry.
What can I do to protect my property?
Sign up to the Land Registry Property Alert Service
Check that all your properties are registered with the Land Registry and sign up to get property alerts. This service will email you if someone applies to change the register of your property, for example, if someone tries to use your property for a mortgage. This will not automatically block any changes to the register but forewarned is forearmed; you’ll be able to protect your property before recovering it becomes both expensive and tricky.
You can get alerts for up to 10 properties – there’s no fee.
Put a restriction on your title
Putting anti-fraud restrictions on your properties will stop HM Land Registry registering a sale or mortgage on your property unless a conveyancer or solicitor certifies you made the application. It is free if you are a company owning property or a private owner who does not live at the property. If you live at the property, you can still apply for a restriction, but it will cost you £40.
For information about how to apply, go to the gov.uk website.
Be aware during the buying process
Criminals can also try to intercept money that is being transferred from buyer to seller. You can reduce the risk by:
- Choosing your conveyancer/solicitor carefully. Make sure they are registered with Law Society or the Council for Licensed Conveyancers.
- Reading everything you are sent by your conveyancer very carefully. The bank details you were provided with by post at the outset will not change.
- If you receive the solicitors/conveyancer’s bank details by email, phone the company and make sure they are correct.
Be wary if you are being pushed to proceed quickly. Fraudsters often use this tactic to catch you off guard and prevent you from having the time to check them out.
What are the main property fraud scams?
Holding deposit scams
Fraudsters posing as estate agents will use high-pressure sales tactics to sell units in a new build development. The unwitting buyers will be asked to pay a holding deposit to secure the property, the fraudster pockets the money and disappears.
Criminals intercept emails between solicitors and buyers and alter the bank details to pay the money into their account.
Here the fraudsters pose as the property owners and sell it on without the true owner’s knowledge. They may move into the property and legally change their name to match those on the title deeds. Empty properties and holiday homes are most at risk. Be wary of homes advertised on platforms like Gumtree or Ebay.
Companies offer high-yield investment opportunities in buy-to-let properties or land that turn out not to exist, be in poor condition, or can’t be built on in the case of land. The target is persuaded to hand over their money and will never see any return.
Before you make an investment, always do your research, and if something looks too good to be true it probably is.
Cash home buying companies
Shady home buying companies that offer quick cash sales may over-promise on price and then drop the amount at the last moment, leaving you with no option other than to accept. Some unscrupulous companies rush their targets into signing paperwork that they have not had time to fully read, which prevents them from selling the property to anyone else.
If you think you may be the victim of property fraud, you should:
Contact the HM Land Registry property fraud team on 0300 006 7030 or email email@example.com
Contact a legal professional such as a solicitor or Citizens Advice and Action Fraud.
Property owners usually manage to recover their property, even though it’s a difficult process. Duped buyers are often the ones who lose money. The law is now beginning to blame the buyer’s solicitors for failing to spot the fraud. This gives buyers more security and lawyers even more responsibility.
There’s no need to be. You simply need to make sure you’ve done what you can to prevent fraud. If you’re a landlord in need of more guidance, we can help landlords in Islington, Stoke Newington, Newington Green, and Highbury. Get in touch.