Don’t Get Caught Out by Property Fraud
In November 2021, the BBC reported on the shocking case of a man who found his house in Luton had been fraudulently sold while he was working away. The man described the moment when he struggled to get back into his house and establish himself as the rightful owner, only to find that the Land Registry entry had been changed without his knowledge.
Property fraud often sees the scammers impersonating the registered owner and once they have convinced a conveyancer or lender that they are the owner and have the right to sell, they can list the property and net the proceeds.
The BBC reports that the Land Registry paid out £3.5m in property fraud compensation last year.
Lasting power of attorney fraudulent house sales
In December 2021, the Radio 4 consumer affairs programme, You and Yours investigated the sale of homes through fraudulently obtained lasting power of attorney (LPA), recounting the story of a 57-year-old woman who discovered her mortgage-free home, that she had owned for more than 20 years, had been put up for sale without her knowledge.
The woman, who had not been living in the property at the time as it was undergoing renovation, was alerted to the issue when she received an email from the property freeholder thanking her for a payment for a resale pack. She queried the details with the freeholder and was alarmed to find out that a fraudster, claiming to be her sister, had registered an LPA and was in the process of attempting to sell her house.
The astonishing and shocking story was mentioned in the House of Commons. Shadow Justice Secretary Steve Reed told parliament that the fraudster had gained the LPA by filling in an official form, using fake names and signatures of witnesses who did not exist. “Astoundingly,” he said, the Office of the Public Guardian (OPG) is not required to carry out basic identity checks and granted the LPA without ensuring this woman was who she said she was.
Are you at risk of property fraud?
Property fraud occurs when a scammer cons another party into believing they have an interest in a property in order to defraud significant sums of money. The criminals may claim to be the owner, a buyer, borrower, lender or conveyancer, or they may claim to be representing the owner through power of attorney.
Fraudulent property transactions have become a considerable threat for homeowners, especially if they are in one of the ‘at risk’ groups.
The types of property which are more likely to attract a fraudster are:
- Empty properties (both residential and commercial)
- Properties being redeveloped
- Probate properties
- High-value properties
- Properties not registered with HM Land Registry
- Property that is a contact address for an owner who lives elsewhere
- Property that is not mortgaged
You may be at greater risk of property fraud if:
- You have been the victim of identity theft
- You are elderly or vulnerable
- You live overseas or at another property
- You rent the property to tenants
How can I protect my property?
Properties bought or mortgaged since 1998 will be registered with HM Land Registry. If your property is not registered, this is the first thing you should correct. Unregistered properties do not qualify for compensation claims if property fraud occurs.
To check the information held about your property you should apply to HM Land Registry. You can do this online; however, there is a small fee for this service. You should inform HM Land Registry immediately if the information held is incorrect.
HM Land Registry alerts
You can sign up for alerts which will notify you when an application is made to change the registry details for your property. This service cannot block a change, but it will give you an early warning so that you can take action. This is a free service. You can register for alerts on up to ten properties. To contact the Property Alert team at the Land Registry you can call 0300 006 0478 or go to propertyalert.landregistry.gov.uk.
Submit a restriction for your title
This allows you to prevent activity in respect of your property, such as an application for a mortgage. Owner occupiers must pay a fee for this service.
Business owners can request a restriction for company-owned properties. Owners who do not live permanently at the address can also apply for a restriction. For these applicants, the service is free.
Preventing LPA-related property fraud
Sadly, the systems used by the Office of the Public Guardian for the creation and processing of LPAs are woefully out of date and, despite a 12-week consultation on the process which occurred in July 2021, they are still open to criminal abuse.
Dominic Raab, Secretary of State for Justice, has said that the Government is in the process of reforming the system; however, it appears that currently the requisite safeguards are not in place.
If you wish to create a Lasting Power of Attorney and appoint a person of your choice to handle your affairs when you are no longer able, contact Wellers today. We can ensure the LPA is created and witnessed correctly, and is legally binding. Once an LPA has been registered with the Office of the Public Guardian, in practice, it should make it more difficult for scammers to set up a fake LPA in your name.
Help, I think I’ve been the victim of property fraud
If you believe you have been the affected by property fraud, you should speak to a property fraud solicitor and they will be able to advise you on your best course of action.
You can contact the HM Land Registry property fraud team on 0300 006 7030 (restricted office opening hours may apply).
You can report the issue to Action Fraud on 0300 123 2040 at any time. This is the national reporting centre for fraud and cybercrime in England, Wales and Northern Ireland. When you make a report you will be given a police reference number and the details will be passed to the National Fraud Intelligence Bureau.
Legal advice on fraudulent property transactions
High-value property fraud has become increasingly attractive to scammers. Talk to Wellers Law Group today if you have been the victim of a fraudulent property transaction. We can explain your rights and help you seek justice through all available means.