Property fraud is on the rise. It primarily affects residential and commercial landlords as well as private individuals with high worth property. If you rent out property or own property that has no mortgage on it, then this article is for you.
Edwin McLaren and his wife Lorraine were convicted for large scale property fraud after the longest criminal trial in UK legal history. Edwin was sentenced to 11 years after being found guilty of persuading vulnerable victims to sign over their homes as part of a £1.6 million property fraud scheme. His wife received a sentence of two-and-a-half years.
However, the McLaren’s approach was unusual in property fraud cases. In most cases, the fraudster poses as you and attempts to sell or mortgage your property. If this isn’t promptly detected, you might find that your property has been transferred, sold or mortgaged without your knowledge. This can happen to both residential and business properties.
A high-profile incident of this sort occurred in 2015 with Sir Max Hastings, the now Editor-in-Chief of the Daily Telegraph. His wife, Penny, owned a property in Fulham, which she rented out. She was very surprised to receive an e-mail from a Mayfair solicitor informing her that his client had purchased her property for £1.3m.
The “sale” had been facilitated by her tenant posing as her representative. His accomplice had changed her name by deed poll to Penny Hastings and applied for and obtained a passport in this name to prove her identity to the professionals involved.
In this case, the Land Registry, which is responsible for holding records of property and land, were suspicious and declined to register the sale. So, Penny continued to hold the legal title to the house. The real victim in this case was the buyer who had paid the full amount for the house with no mortgage. Her money was last seen on its way to a bank in Dubai.
In a more recent incident, on 16 January 2017, Dianne Moorcroft and her daughter, Laylah de Cruz, were found guilty of deceiving professionals into enabling a fraudulent application for a £1.2 million bridging loan on a house in Kensington.
Dianne impersonated the owner who was not living at the property. When the application was made to the Land Registry, it was identified as fraudulent and cancelled, so the registered owner did not lose their property. Unfortunately, the loan company had already advanced the monies.
In both these cases, the owners were at risk as:
- Their property was rented out
- Their property was high value
- There was no mortgage on their property, so no bank or building society was involved
- They lived away from the area
- The only contact address they had registered with the Land Registry was that of the property itself
- Their identity had been stolen
Other risks factors include:
- Your property is empty
- Your property hasn’t been registered with the Land Registry
- You live overseas
How to Protect Yourself Against Property Fraud
There are several steps you can take to protect yourself against property fraud:
- Ensure your property is registered with HM Land Registry. Your property will be registered if you have bought or mortgaged it since 1998. Registration gives you some protection against fraud and, if you do become a victim and lose money, then you may receive compensation. If your property isn’t registered, then you will not able to make a claim for compensation.
- Make sure your contact details on the Land Register are up-to-date. You can add up to three addresses and your e-mail, so you can be contacted about any changes to the register.
- Track changes to the register. Once you have registered your property and entered your contact details, you can sign up to HM Land Registry’s Property Alert service. You will then be contacted if there is certain activity on your property, e.g. someone tries to take a mortgage on it.
- Put a restriction on your title. A restriction gives you an additional layer of security in preventing unknown activity from affecting your property, such as a transfer or a mortgage. The wording of a restriction will create an extra obligation to satisfy the restriction requirements such as requesting a letter of consent from you (or your Solicitor).
An application for a restriction is a cost effective and quick way of helping to prevent any unauthorised activity and normally costs a maximum of £40. We can make the application on your behalf so you have the peace of mind that your property is secure.
A restriction is highly recommended for landlords and companies who own high value property. You have the option to enter up to three addresses on your application ensuring that you can provide the relevant address details, so should any activity take place, you are notified by the Land Registry at the earliest possible opportunity.
If you would like further advice, please contact our Commercial Property team by calling 01283 526 200.