Property Fraud Prevention: A Guide for Owners

Shilpa Mathuradas

What steps should you take to prevent property fraud?

An individual’s property is usually their largest asset and not an asset an individual wishes to lose through fraudulent activity. However, property fraud is the fastest growing form of fraud in the UK.

There are a number of factors that have led to the rise in this fraud including:

• Increasingly sophisticated techniques available to fraudsters when passing identification checks, making it harder for solicitors and agents to detect fake identification;
• The digitalisation of Land Registry records, making it easier for fraudsters;
• The rise in property values, which increases the potential financial rewards for fraudsters who successfully commit property fraud.

Properties which are at high risk are those which are:

• of high value;
• left empty;
• located in prime locations such as near an airport;
• unmortgaged;
• owned by individuals who are living abroad;
• registered in the name of a company; or
• let out to tenants.

There has also been an increase in rental fraud, with potential tenants creating entirely new identities in order to secure a particular property. Often when they get the property, rather than living in the property themselves, they either let it on a short-term basis by advertising it on sites such as Airbnb or Booking.com, or alternatively create partitions and turn the property into a house in multiple occupation.

Both these issues can cause problems for owners who may be leaseholders and therefore find themselves in breach of their leases, or who, in the case of a house in multiple occupation, may be required to obtain a licence from the local authority allowing the property to be let in this way. This could lead to criminal sanctions.

So, what steps should property owners be taking to avoid being the victims of fraud?

1) You should ensure that the details the Land Registry have for you are kept up to date. The Land Registry should have up-to-date postal and email addresses so that they can contact you quickly;

2) You should ensure that you set up a property alert in respect of your property. The HM Land Registry allows individuals to monitor up to 10 registered properties free of charge. Email notifications are sent whenever significant activity or applications are made in respect of the property you are monitoring;

3) Since 2012, you can place a restriction on your property which provides that HM Land Registry will not register a sale or mortgage of the property unless a conveyancer or solicitor certifies that the application was genuinely made by you;

4) Taking up references of potential tenants should be rigorously undertaking;

• Any documents should be examined for strange font alignment or mismatched spacing on financial PDFs;
• Contact details should be independently verified by checking independent company registries and telephone numbers, and contact should then be made using the independently verified details.
• Engage companies that use government approved intelligence to check passports and identification generally.

5) You should regularly check properties when they are vacant to ensure that they have not been broken into and occupied by trespassers;

6) You should also regularly check tenanted properties to ensure that they are occupied by the person to whom you let the property and that the property is being used as intended, i.e. as a private dwelling occupied by a single family, or for whatever other purpose was agreed. The tenancy agreement will usually contain a clause allowing the landlord or its agent access to the property on reasonable notice. It is often found that properties are being let on a short-term basis, partitioned and occupied by several occupants, used to grow cannabis, or used as brothels, without the owner’s knowledge.

7) If you are resident abroad, it is important to get an agent, friend or relative to inspect the property at regular intervals.

Taking action against property fraud

If you think you have been the victim of property fraud then you should contact the HM Land Registry property fraud line at reportafraud@landregistry.gov.uk, or on 0300 006 7030. Alternatively, you can report the fraud to Action Fraud on 0300 123 2040.

Unfortunately, property fraud is here to stay and, with the advancement of artificial intelligence, the fraudster are becoming increasingly sophisticated. Taking proactive steps to protect your property is more important than ever. At Osbornes, our experienced property litigation solicitors can advise on the measures available to safeguard your interests and provide guidance if concerns arise. Contact us today for expert advice by:

• Filling in our online enquiry form; or
• Calling us on 020 7485 8811