IN TRUST SUMMER 2017: PROTECTION AGAINST PROPERTY FRAUD
12 / 07 / 2017
Over the past twelve months there has been a spate of cases where property purchasers have been duped into dealing with a seller who is not the true owner. Although the facts differrin each case, the hallmark is that the fraud was spotted after the money was paid over but before the transfer was registered at the Land Registry. The result being that the buyer has lost both the property and his money with no recourse against the impostor seller (who, together with the sale proceeds, has long since disappeared). The buyer has then looked for redress from the solicitors involved and the reported cases have explored the liability of those solicitors for the loss. The most recent case (against solicitors Mishcon de Reya) is still ongoing and involves liabilities in excess of £1m.
The types of property that are most at risk of such fraud, are those which are mortgage free and unoccupied; as might be the case if the seller is non-UK resident, or the property is a second home. So what can you do to try and prevent an imposter seller?
If you do not have a mortgage, we would recommend that you apply to the Land Registry to have a restriction entered on the property title to prevent a sale being registered with the Land Registry without a certificateesigned by a conveyancer that they are satisfieddthat the seller is the true proprietor.
This restriction can be entered at any time. Property owners with a mortgage will already have a restriction on their title that effectivelyyprovides similar protection.
We would also recommend that all property owners register with the Land Registry’s Property Alert Service. Once you have signed up to the service, you will receive email alerts when certain activity occurs on your monitored properties, allowing you to take action if there is any suspicious activity. Wedlake Bell’s Private Client and Residential Property teams work closely together and are continuing to monitor developments in this area to best protect clients’ properties from the risks involved.