Business Law: Andrew Nicholson of Barker Gotelee on the risk of property fraud
PROPERTY is usually the most valuable asset people own and in recent years it has proved to be an attractive target for fraudsters who have sold or mortgaged properties to raise money.
The properties most vulnerable to fraud are usually empty, tenanted or free of mortgage.
Those individuals who are at a higher risk of fraud include absent owners (possibly living abroad), buy to let landlords and elderly persons who are not living in their properties whilst they receive long term or residential care.
The Land Registry has recently offered some useful tips to aid owners in protecting their property from fraudsters:
n Ensure that your property is registered at the Land Registry. If the owner then becomes an innocent victim of fraud and suffers financial loss then he or she will be compensated for that loss.
n Once a property is registered the owner should make sure that their contact details are up to date, so that they can be contacted easily. Land Registry rules enable up to three addresses to be noted on the register and it is possible to give an email address or an address abroad which should enable an absent property owner to be easily reached.
n Owners who feel that their property may be at risk can have a restriction entered on their property which is designed to help prevent forgery by requiring a solicitor or conveyancer to certify that they are satisfied that the person purporting to sell or mortgage the property is the true owner. As from February 1, 2012, the Land Registry has stated that there will be no fee to pay for a homeowner who wishes to register this restriction, provided that the person does not live in the property they wish to protect. Owner-occupiers are required to pay a fee of �50 if they wish to register a similar restriction.
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Malcolm Dawson, chief land registrar, said: “We take the issue of fraud very seriously and work closely with other organisations including the Law Society to do all we can to reduce the opportunities for fraud and to identify and take corrective action when it has happened.”
He added that since September 2009 the registry had prevented fraud in over 100 applications, involving properties valued at more than �47million.
The statistics show that, in 2010, 30 of the 71 claims paid out by the Land Registry for fraud and forgery were by non-family members.
Of these, 23 involved properties with an absent owner and amounted to �2m out of the total of �7.3m paid for fraud and forgery claims.