Property Fraud Barred by the Land Registry in 2018 Reaches £130 Million

The amount of attempted property fraud barred by the Land Registry this year is in excess of £130m, a Freedom of Information request has revealed.

Statistics show that fraudulent property sales are on the increase, with the value of successful frauds more than tripling in the past few years – from £7.2m in 2013 to £24.9m in 2017. The rise in successful crimes may be attributable to an improvement in available technologies.

Analysts note: “Fraudulent property schemes are becoming more sophisticated and increasingly take advantage of technology and access to personal data.”

Such schemes are targeting both vendors and buyers, largely through forms of identity theft. In some cases, false sales by those claiming to be owners are being carried out, with criminals renting properties to intercept post and falsely pose as the property owner.

Whilst in the vast majority of cases, properties are successfully returned to their rightful owners, the process for rectifying the fraud is nonetheless often lengthy and costly.

Furthermore, in the case of commercial property owners, advisors note that falling prey to fraud can cause not only financial loss, but “long lasting damage to [the company’s] reputation.”

Banks urged to take more responsibility in verifying account holders

Recent rulings in the Court of Appeal have highlighted that the solicitors of a fraudulent seller may be held liable in part for the losses to a duped buyer, emphasising the importance of thorough identity checks.

In the majority of cases however, fraudsters are intercepting legitimate correspondence between vendors and buyers towards the end of a sale. Increasingly, this is achieved by fraudsters hacking into a buyer’s or solicitor’s email to ask that purchase money be transferred to a different account.

In such instances, experts have urged for banks to take more responsibility in verifying their customers, to prevent fraudsters, potentially using forged documentation, from opening an account in another name. In some cases, recipient banks have paid refunds and compensation to the victims of fraud using false accounts verified by the bank. However, as there is no legal requirement for them to do so yet, compensation from banks is not guaranteed.

Purchasers are therefore advised to be diligent in double checking any changes to payment in person or over the phone, with the vendor or their representatives.

Land Registry services help owners to protect property

The Land Registry hold an official register of nearly all properties in England and Wales and provides the binding, legal record of property ownership.

Property owners can guard against fraud by registering with the Land Registry for their free Property Alert service, to receive updates whenever someone makes a search on their property’s title or attempts to make a change to its registration.

In addition, filing an RQ request with the Land Registry can bar the entry of any new sales on the register without it first being checked with the owner’s solicitor. Applications for an RQ restriction are available free of charge to owners of a property who do not live on the premises themselves, as well as to businesses that own a commercial property.

Owners who live on the property may still apply for a restriction, for a fee of £40. For all owners, ensuring that up to date contact details are provided to the Land Registry ensures that any notifications on new transactions are received.

Whilst any property that has been bought or mortgaged since 1998 will be registered with the Land Registry by law, it is important for owners to ensure that a property is registered, so that it will be possible to obtain compensation in the event of fraud.

Contact our residential conveyancing team today

IBB’s team of property solicitors can advise on all aspects of buying, selling and mortgaging property. If you would like further information on protecting your property from fraud or for any other conveyancing enquiry please contact Gary Bunce on 03456 381381 or email conveyancing@ibblaw.co.uk .