The Coronavirus pandemic has left many people and businesses vulnerable to fraud, ranging from delivery scams, vaccine scams, as well as phishing and fake websites. One area that is at a particularly high risk of fraud is the property market.
Increasing reports of property fraud have emerged involving a property being sold or mortgaged without the owner's knowledge, fraudulently using the owner's identity to do so. This is increasingly likely where properties are unregistered or if the property is left vacant for a period of time. Businesses should be particularly careful as the constant threat of lockdowns and home working risks business premises being left unoccupied for potentially significant periods of time, making it easier for fraudsters to take advantage.
Most of these fraudulent transactions involve the fraudster impersonating the owner of the property and either selling or mortgaging the property to raise funds. This can then leave the real owner homeless, without business premises or with a mortgage over their property that they must raise the funds to redeem.
What can you do?
HM Land Registry offers a few key ways to help protect your property against fraud, including:
- Signing up to their free Property Alert Service;
- Register the property if it is not already registered;
- Apply for a restriction preventing uncertified applications against the property.
Property Alert Service
The Property Alert Service can be used by individuals or businesses to ensure that you are notified of applications affecting the property, including new mortgages or changes in ownership. You can also register for Property Alerts for up to 10 properties, which means you can keep an eye on your property portfolio, your business premises, or your elderly or vulnerable friends and relatives' properties.
If your property is not registered, it is more difficult to prove who the owner is. Solicitors carry out as thorough checks as they can, but if the property is registered then the ownership information is much clearer. When you register your property, it is also important to provide your contact information to HM Land Registry as they can use these details to contact you if they suspect fraud or if there are issues with the property.
Restrictions on Registered Title
You can also enter a restriction on the property to limit the power to make applications in relation to the property so that a conveyancer or solicitor must certify that the application has been made by the legitimate owner. Adding this extra certification step will help to prevent a fraudster from using your identity to make changes to the property and should have a relatively small impact on you as the true legal owner.
However, this restriction can only be entered on a property that is registered, so it is important that you register the property before entering a restriction.
In most circumstances, the application to enter this type of restriction costs £40, however there are limited circumstances where the application is free including: business owners, and owners that do not live at the property.
Originally Published 14 December 2021
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.