Catherine Fleming
Posted on 20 Nov 2014

Property fraud – cost-effective protection methods

Property fraud is not a new phenomenon, but it is fair to say that those perpetrating property fraud are becoming more sophisticated. Whilst Land Registry has stopped fraud on properties worth £66 million in the last five years, this is likely to be just the tip of the iceberg.

Types of fraud

Almost all types of property fraud involve identity fraud to a greater or lesser degree.  Common examples include situations where the fraudster uses a stolen identity and fraudulent papers to mortgage a property without the owner's consent, thereby pocketing the loan monies, or selling an empty property not own in their ownership.

Which properties are most at risk?

  • Unoccupied properties, residential or commercial
  • Tenanted properties
  • Properties where there is a family dispute
  • Properties without a mortgage
  • Properties undergoing redevelopment

Whilst residential properties are particularly at risk, commercial properties are not immune.

Practical measures to combat fraud

There are a number of practical measures that owners can undertake to mitigate against the possibility of property fraud.

  1. Register unregistered land
  • Although Land Registry will charge a fee for this, fees for voluntary applications are discounted.
  • Keep your address for service up-to-date
    • Keeping your address for service at Land Registry up-to-date is important. This is not simply to protect against fraud, but also to ensure that Land Registry can contact you in respect of other matters pertaining to your land.  It may be helpful to provide more than one address for service to Land Registry (up to a maximum of three is permitted).
  • Register with Land Registry's "Property Alert"
    • This service was launched in March 2014. Customers can set up a free account at www.gov.uk/propertyfraud or call 0300 006 0478. This facility can monitor up to 10 properties. It works by alerting you by email when Land Registry receives an application to change the register as well as for official searches.
  • Register a restriction on the title
    • This restriction requires a solicitor or a conveyancer to certify that they are satisfied that the person selling or mortgaging the property is the true owner. There are specific forms of restriction for owners not living at the property and also for business owners. In the case of business owners, a restriction for up to 3 titles can be registered before a fee is charged.

    These measures demonstrate that there are simple and relatively inexpensive ways for property owners to help protect themselves against property fraud. If you would like more information about any of the issues raised in this article, please contact Cathy Merchant at catherine.merchant@michelmores.com.