Over recent years there have been a number of high profile fraud cases highlighting the vulnerability of owners of land and property to fraudulent transactions.
The Land Registry have identified categories of landowners who are most at risk from fraudsters; those who rent out property, if the property is empty, not mortgaged or is not registered at the Land Registry.
Additionally those who live overseas or whose identity has been stolen can be potential victims. The Land Registry recommends signing up for property alerts (www.gov.uk/guidance/property-alert) and putting a restriction on the legal title to prevent the Land Registry from registering a sale or mortgage unless the application has been certified to have been made by the landowner.
Recent cases show how such steps go a long way to prevent fraudulent transactions. For example in March 2017, a fraudster was jailed for five years for impersonating the owner of a house in London, who was not living at the property at the time, to apply for a £1.2 million bridging loan. It was only when the application was sent to the Land Registry that it was identified as being fraudulent.
Solicitors can prevent fraud from happening but there have been instances where the lack of identity checks have led to property fraud in conveyancing transactions. In 2016, a high profile case led to conveyancers on both sides of a transaction being held liable for the actions of a rogue seller. On completion, funds of £470,000 were released to the fraudster in Dubai. The monies were never recovered. As both solicitors had failed to carry out the necessary identity checks they were held jointly liable in negligence.
Impersonation is one of the frauds that can be most difficult to detect; hence the obligations placed on conveyancers to check the ID of potential clients.
We recognise issues of this nature are sensitive but understand and appreciate the impact fraud can have on individuals and organisations, especially when the asset concerned is your home or property.
Simon Lockley, partner at Lupton Fawcett LLP, specialises in fraud and is part of Lupton Fawcett’s civil fraud asset recovery unit providing expert advice and assistance to corporate and individual victims of fraud.
For further information on property fraud or to arrange a confidential discussion please email us at firstname.lastname@example.org.