You know that if you own a house or flat it can be targeted by thieves looking to steal cash or jewellery. But did you realise that there are some thieves out there who could be trying to steal your house itself – not the bricks and mortar, but your legal title to the property.
Property fraud of various sorts has been on the up for some time. The scams which have been used in recent years include:
- tenants pretending to be the landlord and 'selling' a property to an innocent buyer
- fraudsters stealing the identity of the owner of a mortgage-free property, getting a mortgage on it and disappearing with the money
Up until now it has been difficult for owners to get advance notice of any fraudulent attempt to sell or mortgage a property. The first that many knew about it was when they found someone else living in the property or a bank threatening to repossess the property for non-payment of a mortgage.
The new service Property Alert service just launched by the Land Registry should help to stamp out this type of property fraud. (The land registry is the government agency which keeps and maintains the register of property titles for England and Wales. )
New service will email alerts of potential fraudulent transactions
The Property Alert service is free and anyone can register to receive alerts.
An email alert will be sent to anyone who has registered when an application for an official search against the title or an application to register a transfer or mortgage is received by the land registry.
If owners get an alert of any transaction which they do not know about they should then contact the registry's Property Alert team straight away so that appropriate action can be taken.
Innocent buyers or mortgage lenders and their solicitors will not be able to detect in advance whether a transaction is fraudulent. It often happens that the fraud only comes to light long after a transaction has been completed, when the innocent party finds they have been duped by a fraudster.
During normal conveyancing transactions an official search of the register is made just before completion. This will confirm to a buyer's solicitor that the seller or borrower still owns the property. It also 'freezes' the register until the transfer or mortgage deed is lodged for registration after completion.
Owners will need to act quickly
If an owner has registered for the property alert service they will receive an email telling them that a search has been made. This will give them the opportunity to contact the registry and warn them of a possible fraud.
But owners must act quickly – these days search applications are usually made just a day or two before actual completion is due to take place. As they are made electronically and the result is usually available immediately it is now not uncommon for the search to be made on the day of completion itself.
And it is also increasingly common for transfers and mortgages to be lodged for registration electronically – indeed the registry is now encouraging this.
What this means for a property owner is that a fraudulent transaction can be completed and registered very rapidly before anything can be done to stop it. So anyone getting an email warning them of a suspect application must contact the registry immediately if anything is to be done to stop it.
Who is most at risk from property fraud?
Nevertheless this new service will definitely help prevent these property frauds, and as it is free to use all owners are encouraged to register, but particularly those are at most risk, such as:.
- Where the owner resides abroad or is in a care home and the property is left empty.
- Owners of buy-to-let properties, where the owner does not also live at the property. Tenants can gain access to the landlord’s information and provide proof of residence at the address. They then use this to take out a mortgage against the property or sell it without the owner being aware.
- Owners who don't have a mortgage. According to the land registry that’s nearly half of all registered residential properties.
Non-owners can also register for the service
You do not have to own a property to register for alerts. So another family member could receive alerts if the owner is not available or unable to look after their own affairs.
This will also be useful for anyone who has an interest in a property and would want to know if it is being sold. For example when a relative dies a family member could try to sell a property, or a divorced spouse could sell the former matrimonial home, without dividing the proceeds of the sale with those who are entitled to a share.
For more information and to register see http://www.landregistry.gov.uk/public/property-fraud
There are other ways to help prevent these property frauds – for example it is possible to register a notice on the title so that a transfer cannot be registered without confirmation from the owner's solicitors. For more information about this contact your conveyancing solicitors.