Can you imagine returning to your home one day to find out unexpectedly that it now belongs to somebody else?
A well reported example of this occurred in 2021 when Reverend Mike Hall, who had been working away in north Wales, returned to his property in Luton to discover that the locks had been changed, all furnishings had been removed, and that there was a man living there who had started carrying out building works. A fraudster had cloned his driving licence and had set up an account in his name in order to receive the sale proceeds.
This is not an unusual situation and information published by the UK Government shows that property fraud is on the rise. The information reveals that the Land Registry paid out £5.4m for 540 indemnity claims in 2020-21, and £6.9m for 598 indemnity claims in 2021-22 with the Land Registry accepting that “fraud/forgery usually accounts for the largest share of indemnity payments”.
What are the potential risks?
Fraudsters may target your property by pretending to be you, in order to sell or mortgage your property to raise money, and then disappear. There are certain situations where the risk of this happening is likely to be higher, some examples being:
- When your property is unoccupied.
- When your identity has been stolen/lost.
- When there has been a family dispute e.g. where a couple divorce or separate.
- When your property is rented out – a fraudster ‘tenant’ may change their name by deed poll to match landlord’s name and then sell the property.
- When your property is unmortgaged – fraudsters are unlikely to be interested in a mortgaged property because they know that funds will be needed to repay the mortgage lender before the property can be sold, and they may not be able to find out how much the charge is worth.
- When your property is unregistered – as the property will not have changed ownership since 1998 and therefore it is more likely to be mortgage free.
How to reduce the risks
1. Register your property
The main reason people register their property is because it allows them to electronically store their deeds on the Land Registry’s central register, so the deeds are easily accessible. If you do not register your property, you will have to rely on producing your physical deeds when proving ownership of your property. This can be problematic especially if any of the deeds are lost, damaged, or stolen.
Registering your property also ensures that you can be compensated if you are a victim of fraud and suffer financial loss.
2. Sign up to property alerts
Assuming your property is registered, you will be able to sign up to this free service which enables you to receive email alerts when there is any significant activity on your property – for example, an application to register a mortgage, or to change the registered owner of the property. The alert will tell you who the applicant is, the date, and the time it has been received. You can get these alerts for up to 10 properties, in case you have more than one property and/or want to help protect vulnerable family or friends.
It is worth noting that the property alerts do not stop the fraud from happening, it simply alerts you to any significant activity on the property. It will be for you to decide whether you believe the activity is potentially fraudulent or not. If it is, the alert email will tell you who to contact.
3. Apply for a counter-fraud restriction to be placed on the title
A restriction limits a property owner’s ability to deal with their property. A typical example of this is when you are selling your property which has a mortgage. If there is a mortgage, there is likely to be a restriction on the title registered in favour of the Lender requiring you repay the mortgage, or to get your Lenders’ consent to any transfer of the property. However, if your property is unmortgaged, this restriction will not exist and therefore making the property more at risk of being targeted by a fraudster.
To help protect your property in this scenario, a counter-fraud restriction can be applied for to be entered on your property title. The wording of a counter-fraud restriction will state “No disposition of the registered estate by the proprietor of the registered estate is to be registered without a certificate signed by a conveyancer that the conveyancer is satisfied that the person who executed the document submitted for registration as disponor is the same person as the proprietor.” This means that a fraudster would be prevented from selling or mortgaging your property without obtaining a signed certificate from a professional conveyancer or solicitor. The conveyancer or solicitor would need to be satisfied that they are the true owner of the property by certifying that they have identified them personally. This restriction is therefore particularly useful for adding an extra layer of protection if your property is unmortgaged and/or where your identity is at risk of being impersonated.
It is worth noting that this identification process would also apply to yourself should you decide to sell your property, however this is unlikely to be problematic.
4. Keep your contact details up to date with the Land Registry
This may sound obvious, but if you own a property and live somewhere else, the Land Registry will be unable to contact you regarding any important applications they receive in relation to that property if you have not provided them with your up-to-date contact details. You are able to provide up to three contact addresses, including an email address and an address abroad, to the Land Registry.
This article is co-written by Chartered Legal Executive Stuart Harries and trainee lawyer Cameron Tinkler.
The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.