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How can you protect yourself from property fraud?

Property / 13 February 2019

Barely a week goes by these days without another “Fraudsters stole my house” story hitting the headlines.  Sadly, property fraud is on the increase in the UK and if you own a property you could potentially be at risk of falling victim. In this article, we outline some of the steps you can take to protect your property from fraudsters.

What is property fraud?
Property fraud is where fraudsters try to gain ownership of a property, otherwise known as “property hijacking”.  The most common type of fraud is where fraudsters steal a property owner’s identity, then transfer the property into their own name using forged documents and attempt to sell it or raise a mortgage over it.  The property owner may not be aware of what has happened until an application is made to HM Land Registry (HMLR) to register a change in ownership, by which time usually the fraudsters will have already banked the money and disappeared, leaving the owner to deal with the consequences.

Are you at risk? 
Fraudsters tend to target properties:

  1. that are owned by sole individuals
  2. that are rented out or empty
  3. where the owner lives somewhere else for part of the year
  4. where the owner has died and the property is held in trust
  5. that are mortgage-free
  6. that are not registered at HMLR

How to keep safe
Whether you are a landlord or homeowner, HMLR has introduced some helpful measures you can take to protect yourself.

Property Alert service
HMLR runs a monitoring service called “Property Alert” which has proved to be an effective fraud detection and prevention tool.  The service sends email alerts to subscribers whenever there is significant activity on a monitored property, for example, an application to register a new mortgage.  If the alert email relates to something expected, then you do not need to do anything.  However, you can take swift action if something seems suspicious.

If you own or are responsible for a property in one of the “at risk” categories above, we recommend you sign up to this free alert service.  Landlords with a portfolio of properties could also benefit from the service as you can register up to 10 properties in England and Wales at any time.

Current contact details
It is vital that you keep your contact details up to date at HMLR.  You may provide up to 3 addresses, including an email address and an address abroad.  Since unexpected address changes may be a possible precursor to fraud, HMLR puts a note on the property title register whenever a contact address is amended, thus enabling preventative action to be taken if appropriate.

Title restrictions
Individuals or companies who own properties which they don’t occupy can register a “Form RQ” restriction on their property titles at HMLR.  Although this won’t prevent fraud, it does warn anyone dealing with the property of the potential risk.

HMLR also offers a “Form LL” restriction as a further safeguard to protect property owners.  This restriction stops HMLR from registering a sale or mortgage on a property unless a solicitor certifies that the application was made by the owner.  The drawback of this, however, is that the restriction could be difficult to remove – a solicitor has to certify they are satisfied that the person selling or mortgaging the property is the true owner.

Taking action
Since 2009, HMLR has blocked more than 275 fraudulent registrations, valued in excess of £133 million.  No system can be 100% fraud-proof, but these simple steps may help to protect you from finding that your property has been sold from under your nose.

For more information, click here or contact us for advice.

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