What is property fraud and how can I protect my home?

According to the ONS (Office for National Statistics), fraud cases have increased by 25% in the past two years, which translates to 4.5 million offences. Additionally, the HM Land Registry claims that over the past five years, they’ve prevented property fraud of more than £100m. To combat this, awareness of property fraud and how to prevent it is critical.

What is property fraud?

Property fraud is when a person or persons attempts to illegally gain ownership of a property that is not their own by stealing their identity. This is impersonation fraud, which according to a UK Finance report, doubled in 2020. It can happen in the UK or abroad to residential and commercial properties and be part of property development scams, too. It usually occurs through one of two methods:

● An impersonation of the registered property owner.

● By using forged documents to transfer the property into their name.

Property is a valuable asset and, therefore, a target for fraudsters because it can be sold and mortgaged to raise funds, which they can then steal. It can be committed by:

● Interfamily or associates

● Tenants or landlords

● Organised crime

Types of property fraud

Property fraud can take many forms and can be incredibly elaborate and hard to spot. Types of property fraud include when:

● Identify theft or impersonation is when a property is sold or mortgaged by a person who is not the legal owner.

● Email hacking is where a fraudster gains access to private emails containing private documents and alters the bank details to theirs in the exchange so that they receive the funds instead.

● A seller scam is when a fraudster impersonates a seller and scams a buyer into transferring money to their bank account. Sometimes this is done via online shopping or auction platforms.

● Impersonation of a conveyancer is when someone pretends to be a solicitor who specialises in the legal aspects of buying and selling property.

● Quick-sale company is when fraudsters set up a false company to buy your home quickly before dropping the purchase price at the last minute.

● Title fraud is when a fraudster has stolen the property owner’s identity and put a title deed in their name.

● Financial fraud is when a fraudster steals money from a financial institution or private lender using the mortgage application process.

● Overseas property fraud is a property development scam where a victim invests in an overseas developer who claims they intend to build second homes or holiday lets. When the victim sends the money, the fraudster will take the money and disappear.

● A buy-to-let scam is when a victim invests a sum into a rental property or development that does not exist, is empty or is seriously dilapidated. The fraudster will promise a regular income from the tenants in exchange for one large upfront payment before they disappear with the funds.

● Land banking is when undeveloped land is marketed over the phone or via a website as an investment opportunity. Fraudsters tell victims that once planning permission is approved, it will sell for an inflated profit to a developer. It is not till later on that the victim realises that there is no planning permission application or that the land doesn’t even exist.

● An overseas residence scam is when a victim buys a property advertised as a permanent residence but registered as a holiday home; this means they can’t live in it as their primary residence.

How fraudsters attempt to sell property

Fraudsters are becoming more sophisticated in their crimes. In particular, they use social engineering tactics, impersonating trusted organisations and technology. They can attempt to sell your property by impersonating:

● The property owner

● Buyers

● Sellers

● Companies

● Lenders

● Conveyancers (solicitors and lawyers)

They will use false documents, stolen identification, false letterheads and emails and registration of fake businesses and qualifications to achieve their goals.

If you’re wondering how they can steal your identity, all they require is your name, address and a copy of your signature. They can obtain these by intercepting mail; owners are often unaware it has occurred.

Who is most at risk?

Fraudsters target any kind of vulnerability, whether age, experience, legal processes or situational. The critical thing to remember is that everyone is potentially susceptible, but some owners and properties are more so than others. Awareness of who is most vulnerable increases the chances of successful preventative measures.

List of those at most risk of property fraud

According to the government website, you are more at risk if:

● Your identity’s been stolen recently or previously.

● You rent out your property.

● You live overseas.

● The property is empty, both commercial and residential.

● The property is not mortgaged.

● The property is not registered with HM Land Registry.

You are also vulnerable if:

● The owner has died, particularly if personal representatives have informal financial agreements and no one is assigned power of attorney.

● The owner is in a hospital or a care home.

● The owner has equity in their property.

● One owner has left the property after an antagonistic breakup.

● The property is being redeveloped.

How to protect your property

However, there are ways you can safeguard your property and make it difficult for fraud to occur. The first step is to check that you’ve registered your property with HMLR, it only costs £3 to check and increases your chances of compensation if you fall victim to property fraud. A conveyancing solicitor can help you with the process should you need support. If you’ve registered your property with HMLR, check that your contact details are up to date, as it ensures they contact you first if a fraudulent application to sell or transfer your property is submitted. If your property is unregistered, a conveyancing solicitor help with the process of registering your property with HMLR.

You should also sign up for the free HMLR Property Alert Service which notifies you via email if an official search or application is submitted. Using this service, you can monitor up to 10 properties at a time, and an individual property can be monitored by more than one person, for example, in the case of multiple power of attorney. Remember, this won’t block activity but will notify you so you can take action.

Remember that the key is to remain vigilant about any property you own or the property of vulnerable relatives and to turn to trusted services such as the HMLR if you have any doubts or concerns.

Protection Methods

Further safeguards you can put in place include:

● Putting a restriction on your property’s title: To do this, you need to apply via HMLR to place restrictions on the title deed; this prevents them from registering a sale or mortgage on your property until a conveyancing solicitor has confirmed that you made the application. It costs £40 if you live in the property, but it is free if you own it privately but do not live there.

● Safeguard your email against hackers: Ensure you regularly check and query any changes to bank details in correspondence with your solicitor. Don’t use public Wi-Fi when exchanging emails, as these are easier to hack. Double-check that all your passwords are strong and that you have up-to-date anti-virus protections on your devices.

● Lawyer Checker: It is a regulator-recommended service that independently checks another solicitor’s or person’s bank account details to ensure they are correct and will flag unusual changes before anyone transfers funds. Always ask your solicitor if they use this service, and ask why if they don’t. It costs £10 as a nominal disbursement.

● Do your research: You should always check for signs of a scam. Citizens Advice gives you some tips on warning signs and where to report or access support.

● Using your intuition: If it sounds too good to be true, it is. You can address any concerns via HMLR or a conveyancing solicitor that you trust if you aren’t sure.

Why Waldrons

Here at Waldrons Solicitors, the law is our business, and we pride ourselves on our 100% commitment to excellent client care. We offer 1-1 legal advice and representation on various legal issues, including conveyancing. So, whether you are looking to buy, sell, remortgage or transfer equity, we can help you regardless of the complexity or seriousness of your issue. Our professional and personable team are here to support you with your home or property every step of the way, and we work hard to resolve problems or concerns efficiently.

We guarantee:

● No sale, no fee, if your sale or purchase does not complete that you won’t pay a penny in legal fees and will only pay for search fees carried out on your behalf.

● We provide regular updates to ensure you are always aware of the situation.

● That our conveyancers are specialists, not generalists, you will always be dealing with a property lawyer with a direct email address and phone number.

● You’ll have access to a dedicated property expert at all times.