Property fraud can be committed against individuals or businesses – there are various different types. The Annual Fraud Indicator 2016 has estimated that the cost to this country is £193 billion a year. The Office for National Statistics recorded 3.8 million frauds and 2 million cyber crimes last year. The City of London Police is currently investigating an estimated £600 million in financial losses.
“Fraud is when trickery is used to gain a dishonest advantage, which is often financial, over another person.” (What Is Fraud and Cyber Crime?, ActionFraud)
When Does Property Fraud Occur?
Property fraud can take place in different forms:
- Your identity could be stolen and then your property sold or mortgaged by someone pretending to be you;
- You could be asked to take part in a property investment scheme or to purchase properties at a discounted rate;
- You could be encouraged to invest some or even all of your savings in properties that are either not yet built or where the land is unsuitable for development and planning permission will never be granted;
- Companies could offer to manage properties on your behalf, they will source them and renovate the properties – again, these properties do not exist. As a result, you could lose all the money you have invested.
Fraudsters target instances where there is no mortgage secured against empty properties. They try and acquire these properties by forging documents or impersonating the owners.
When Are You At Risk of Property Fraud?
There is an increased risk in the following circumstances:
- The property is empty or let;
- The owner lives abroad so does not spend time at the property;
- The owner is elderly and spends time in nursing or care facilities;
- Your identity has been stolen;
- There is no mortgage secured against the property;
- The property is not registered at the land registry.
How To Protect Yourself Against Property Fraud
There are a number of things you can do to protect yourself against property fraud, these include
- Ensuring your property is registered at the Land Registry. If you become an innocent victim of fraud and suffer a financial loss as a consequence, you may be compensated. If your property isn’t registered then no compensation is payable;
- Keeping your contact details up to date at the Land Registry so that you can be contacted easily;
- Following the Land Registry’s protection advice (see below).
The Land Registry advises homeowners to do the following:
- Sign up to receive an alert if anyone makes a change to the property register at the Land Registry. Whilst this wont block the changes, it will alert you to take action. There is no fee for up to 10 properties;
- Put a restriction on the land register preventing sales or registration of mortgages unless a conveyancer or solicitor certifies that the application was made by you. if you are a business owner or do not live at the property, there is no fee for this. If you do live at the property, the fee is a small fee.
If you would like any advice on how to protect your property, or if you are approached by someone with a property proposal, please give us a call to talk through it: 01273 407 970.
by Natasha Challand