Property fraud is one of the most lucrative ways for a fraudster to make a lot of money. In these uncertain times, and with more people working from home than ever before, the Solicitors Regulation Authority (SRA) (that Royce Legal is a part of) has issued a warning against this form of criminality. It is on the rise, and fraud methods are constantly evolving. Here’s what you need to look out for; typically, there will be more than one indicator that fraud is taking place.
Despite all of the heightened security measures and rules and regulations governing property purchases, today’s world is still full of opportunities for fraudsters to deceive buyers and sellers. In reality, some of these developments have benefited them. After all, we now live in a world where email’s convenience and speed have surpassed personal interaction or even a phone call. This makes it simpler for con artists to fabricate facades and weave webs of lies that go unnoticed, leaving some victims bankrupt, homeless, and sad.
Types of Property Fraud
Impersonation and Identity Theft
Criminals may impersonate any party engaged in a real estate transaction, including owners, buyers, borrowers, lenders, or conveyancers.
Individuals impersonating as buyers may make an offer, only to withdraw before exchanging. They can then utilise the information they obtained during the procedure to perpetrate title fraud against the property’s owner.
They could potentially carry on with the transaction and take any funds raised from the lender.
Fake sellers may try to sell or mortgage a property by impersonating the owner and using forged or stolen identification.
Criminals frequently target:
- Homeowners who have died.
- Owners who live overseas.
- Property owners that have accumulated equity in their property.
- Sole owners with unmortgaged properties.
- Absent owners, especially landlords.
- Owners who are in a care facility or hospital.
False discharges may be submitted by criminals (a formal recognition that a mortgage has been paid off).
Be cautious if the source of the discharge is not a lender registered by the Financial Conduct Authority, or if the lender does not provide you with the discharge.
A criminal may pose as a conveyancer or act on behalf of a licenced conveyancing firm. You should double-cheque the details of a conveyancer acting on behalf of another party to ensure they are properly registered.
Criminals may attempt to imitate your company by:
- Utilising forged letterheads
- Establishing a phoney sub-office with the Solicitors Regulation Authority (SRA) using email addresses that differ by a single letter or symbol from the firm’s true address.
If you receive Land Registry messages concerning a property that you do not recognise, contact them — Your company’s name or letterhead has been forged and used falsely.
Criminals may create a fictitious firm or impersonate an existing one.
If a firm does not have a Companies House registration number, it may be a fake or an offshore company. If you want to verify an overseas corporation, you may need to obtain confirmation from a lawyer licenced in the other country.
This is when fraudsters intercept communications between the buyer and their solicitor and change the bank details so that the money is sent to their accounts.
Numerous ‘get-rich-quick’ investment schemes entail convincing you to fork over money in exchange for spurious high returns.
- Land Banking — When a tract of land is touted as having financial potential but can never be built on or may not even exist.
- Investing in Real Estate — When companies persuade you to invest in rented properties, stating that the rental revenue will provide a favourable return. The homes are found to be in terrible condition and unoccupied.
Is there a chance I’ll be a victim of property fraud?
Scammers may target anyone who owns or is in the process of purchasing a home. However, your property is more vulnerable if:
- It is left empty.
- It is rented out.
- You live in another country. It is not subject to a contract.
- Your identity was stolen, and you are not registered with the Land Registry.
How to Prevent Property Fraud?
First and foremost, ensure that your property is registered with the Land Registry. There is a £3 fee. If you discover that any information on the register is incorrect, you must notify the Land Registry. Unregistered properties have not been mortgaged or sold since 1990.
If you believe you are a victim of property fraud, the first thing you should do is register for the Land Registry Property Alert service.
When formal searches and applications are received against the property you want to monitor, you will receive an email alert.
It will not automatically prevent modifications to the register, but it will notify you of what is going on so that you can take appropriate action if necessary.
It’s also a wonderful service for landlords, as you can monitor up to ten homes at once for free.
A property can be monitored by more than one person at the same time, which is beneficial if you and your siblings are looking after a property for parents in care.
Put a limit on your property.
You can further protect your property by requesting that your title deeds be restricted. This stops the Land Registry from recording a sale or mortgage on your house unless confirmed by your conveyancer or solicitor.
What should I do if I believe I am a victim of property fraud?
Homeowners who suspect their property has been the victim of a fraudulent sale or mortgage should contact the Royce Legal Solicitors immediately and speak with specially qualified employees for practical advice on what to do next by dialling 01706 655 592.