Protecting your ownership of a property from fraud
Who is at risk of property fraud?
Ownership of your property is probably your most valuable asset and anyone who owns a property or is in the process of purchasing a property could be at risk of property fraud.
However, there are certain properties that are more susceptible to being targeted such as:
- Unregistered properties
- Unmortgaged properties
- Unoccupied properties where:
- The owner is a landlord who lets out the property; or the owner lives overseas; or the owner is a personal representative of a deceased proprietor.
- Properties with vulnerable owners or owners whose identity has been stolen
Between 2009 and 2023, HM Land Registry prevented more than £340 million worth of property fraud (Keeping a close eye on your property helps us prevent potential fraud – HM Land Registry). This shows that properties are unfortunately an attractive target for fraudsters.
How to avoid property fraud?
A case known as Dreamvar (UK) Ltd v Mischon de Reya and others is an example of where a fraudster was able to successfully take the funds on a sale of a property merely by pretending to be the owner.
The case highlights how if a fraudster manages to get hold of some of your identity documents, there is a chance they could easily try to instruct a solicitor to sell or mortgage your property by impersonating as the purported owner. This is likely to affect those with vacant properties but also could happen at any time even if you are just on holiday for a short while!
If a fraudster manages to complete a mortgage application or the conveyancing process for a sale, the final step would be having this mortgage or sale registered at HM Land Registry against the title.
In order to halt the application being registered, you would need to of course first be aware of the application being made. This is where we can assist in signing you up for the Property Alert Service with the Land Registry.
How does the Property Alert Service work?
The Property Alert Service is where a property owner of any registered freehold or leasehold title is alerted of activity for when either an official search with priority (before the completion of the sale) or an application to update the register (following completion of the sale) at their chosen address(es) for service.
This service allows the property to be monitored by multiple people granting you greater protection and each person can have up to 3 addresses. We think it is sensible to use a variety as these include the option of postal, email and DX addresses (subject to there always being at least one postal address); this will ensure you are immediately notified.
Although, the service will not immediately stop the application, it will instead inform the owner to the activity who can then contact HM Land Registry, if they have not made the application or if there is anything unusual, then HM Land Registry can investigate and put a stop to it.
If you are a landlord with multiple properties, you can set up an alert to monitor up to 10 properties at a time.
Also, you do not have to be the property owner to sign up for the alert; if you are the friend or relative of a vulnerable property owner, you might want to keep an eye on a friend or relative’s house.
What additional steps should I take to prevent my property being targeted for fraud?
Unregistered properties
If you are an existing owner of an unregistered property, you can instruct us to apply for a voluntary first registration application where we will apply to HM Land Registry to have your ownership of the property registered. Then, once the property is registered, we can assist in signing you up to the Property Alert Service.
Registered properties
On all registered properties, we could apply to have an additional security measure registered which would be a restriction on the register of title known as a Form LL restriction. This means that a solicitor will have to certify that the sale or mortgage application is being done by the registered proprietor.
If your property is vacant, tenanted or you are likely to be away for a while, this is a sensible option. We can complete the application on your behalf and the HM Land Registry application fee is free for business owners and those who do not live at the property, otherwise the fee is £40 to register this with HM Land Registry if your live there.
At Progression Solicitors, we encourage you to safeguard your rights as legitimate property owners and can assist by ensuring that your registered property interests are protected from these risks.
Please contact a member of the residential conveyancing team for more information on how we can help whether you own a property or are in the process of buying one.
