Landlords: How to protect yourself from property fraud

Property fraud is on the increase but most people will still be shocked to learn that a property you own can potentially be 'sold' without you knowing a thing about it.

In the last three years, the Land Registry's property fraud line has received almost 3,000 calls and emails as the problem of stolen identity continues to grow.

In an increasingly common scam, known as title theft, fraudsters are either trying to sell or take out a mortgage in someone else's name before disappearing with the money.

Shocking

Former Daily Telegraph editor and historian, Max Hastings, and his wife, Penny, found themselves victims of title theft after they were told that the house Penny owned and rented out in Fulham had been sold for £1.35 million.

A man took out a two year lease on Penny's house using a false identity then, along with an accomplice who changed her name to Penelope Hastings by deed poll and then secured a passport in that name, put the house on the market.

An unwitting buyer, who paid the full amount with no mortgage, handed over £1.35 million to the alleged vendor. Neither he, nor the money, has been seen since and the police are still investigating.

Fortunately, the Land Registry did not register the sale as they suspected a fraud and Penny Hastings maintained the legal ownership of the property.

Who is most at risk from property fraud?

Before 2003, the Land Registry used watermarked land certificates to prove a person owned a property, but they were abolished as the records went paperless and were then made available online to the public in 2006.

Now, all that is needed to sell or remortgage a property is an identity and an address: so if the registered owner is one John Smith, then any John Smith can deal with the property.

It is thus potentially easy for an imposter to adopt a new name. Buy-to-let properties without a mortgage are particularly at risk as tenants can intercept post that might alert the owner to a fake mortgage application.

You are potentially vulnerable if your property is:

• Rented out;
• Empty - perhaps the owner may be living abroad or in a care home;
• Mortgage-free, so no bank or building society has an interest;
• Not registered with the Land Registry

How can you protect your property?

• Make sure any property you own is registered with the Land Registry and that your contact details are up to date;
• Sign up for property alerts from the Land Registry so you will know if someone tries to use your property for a mortgage;
• Consider putting a restriction on your titles - in this way you can stop the Land Registry from registering a sale or mortgage on your properties unless a conveyancer or solicitor certifies the application was made by you;

The Land Registry has a dedicated counter-fraud team and between September 2009 and September 2016 has prevented frauds on over 200 applications representing properties valued in excess of £92 million.

It has a property fraud line - 0300 006 7030 - and you can also email reportafraud@landregistry.co.uk

For help and legal guidance about this and any other commercial property issues, please contact our Commercial Property team.