We have reported previously on the alarming number of fraudulent property transactions taking place each year in both the residential and commercial sectors. A typical property fraud will involve a sale or mortgage, whereby a fraudster passes off property as his own in order to obtain purchase or mortgage funds from an unknowing buyer or lender. Fraudsters have also been known to pass themselves off as landlords, renting property to tenants and recovering rents and deposits. This problem is particularly rife in relation to vacant premises, and even more so where owners are abroad/living far from their property and therefore unable to easily monitor any activity.
As an example, we acted for an overseas owner who found that the tenant of his central London house was seeking to register both a fraudulent mortgage and sale. The fraudster netted several hundreds of thousands of pounds but luckily these losses were borne by the lenders rather than our client.
Fortunately, there are a number of ways to minimise the risk of fraud where title to the property is registered at the Land Registry. These include entry of a restriction on the title – a mechanism which triggers an additional requirement (for example, as a certified statement by a solicitor that the person purporting to deal with the property is indeed the registered owner) prior to an application being processed – as well as ensuring that the proprietor's address for service is up to date. Property owners should note that up to three addresses for service may be supplied and these can include an e-mail address and an overseas address.
Where title to the property is currently unregistered, it is suggested that an immediate application for voluntary registration of title at the Land Registry is made.
The Land Registry is now also in the process of piloting a new scheme known as "Property Alert". This is a free service – currently in a trial phase - which allows owners to sign up for email alerts for up to three registered properties. When an official search (a standard precursor to an application being made to change the register) or application is received in relation to the monitored property, the owner will receive an email from the Land Registry alerting them to the activity and allowing them to intervene if all is not in order.
For more information or assistance with any of the issues in this article, please contact Kerra Jelbert or Martin Codd.