Property fraud
Property fraud, also called title fraud, is when a criminal impersonates a property owner in order to sell the property or raise a mortgage against it without the owner's knowledge. Using forged or stolen identity documents, the fraudster transfers ownership to a fictitious buyer or takes out a loan secured on the property and disappears with the money. It is rare in proportion to the millions of dealings HM Land Registry handles, but the harm when it does happen is severe, and landlords are among the most exposed because they often do not live at the property.
Why landlords are a target
Title fraud concentrates on properties where the owner is not present to notice something wrong. That makes tenanted properties, empty properties, and mortgage-free properties the highest-risk categories. The post goes to an address the owner does not monitor, and with no lender watching the title there is no one else checking either. HM Land Registry and landlord bodies have repeatedly urged landlords to protect rental properties for exactly this reason. From working with self-managing landlords across the UK, the owners most at risk are those with an older property let out long-term, where the correspondence address on the register has not been updated in years and no mortgage exists to trigger lender checks.
How landlords protect against it
There are two main defences, and they work best together. The first is HM Land Registry's free Property Alert service, which lets you monitor up to ten properties and emails you whenever an application is made against a title, for example an attempt to register a sale or mortgage. It is important to understand that an alert warns you rather than blocks anything, so its value is the early warning that lets you act before a fraudulent dealing is completed. The second, stronger step is to apply for a restriction on the title, commonly the Form LL counter-fraud restriction, which stops HM Land Registry registering a sale or mortgage unless a conveyancer or solicitor certifies that the application was made by the genuine owner. A voluntary restriction costs £40 per title where you are the registered owner and is free where you do not live at the property. Keeping your correspondence address on the register up to date, and adding an email address, also helps notices reach you quickly.
What to do if you suspect fraud
If you receive an alert you do not recognise, or correspondence from a solicitor or lender about a transaction you did not start, act immediately. Contact HM Land Registry's property fraud team straight away, since they can place a hold on a suspicious application while they investigate, and report the matter to the police as fraud. Speed matters, because stopping an application before it is registered is far simpler than unwinding a completed fraudulent transfer. Where fraud has already been registered and an innocent party suffers a loss, HM Land Registry operates an indemnity scheme under the Land Registration Act 2002, though recovering the position can be slow. Landlords using August keep their property records and correspondence in one place, which makes it easier to spot when something about a property does not look right.
Property fraud and tenancy fraud are different
The term property fraud is sometimes confused with tenancy fraud, which is a separate problem. Tenancy fraud usually means a tenant unlawfully subletting a property, most often in social housing, or an applicant giving false information during reference checks to obtain a tenancy. Title fraud, the subject of this entry, is about the ownership of the property itself rather than the conduct of a tenancy, and it is defended against through HM Land Registry rather than through the letting process. Thorough referencing and identity checks at the start of a tenancy are the main guard against tenancy fraud, while Property Alert and a title restriction guard against title fraud.
Frequently asked questions
What is property fraud?
Property fraud, or title fraud, is when a criminal pretends to be a property's owner, using forged identity documents, to sell it or raise a mortgage against it without the owner knowing. The owner can be left facing a fraudulent sale or a loan secured on their property.
How can landlords protect against property fraud?
Sign up to HM Land Registry's free Property Alert service to be notified of applications against your titles, and consider a restriction on the title, such as the Form LL counter-fraud restriction, which prevents a sale or mortgage being registered unless a conveyancer confirms it was the genuine owner. Keeping your contact address on the register current also helps.
Are tenanted properties more at risk of title fraud?
Yes. Because the owner is not living at the property, suspicious correspondence may go unnoticed, and mortgage-free rentals have no lender monitoring the title either. That combination makes long-term let and unoccupied properties a more common target, which is why monitoring and a restriction are worth putting in place.
