Avoiding Being a Victim of Property Theft
Unfortunately, these days we are all, through necessity, more security conscious then we have ever been. We always lock our doors and our cars, we don’t leave valuables where they can easily be seen and when out and about we are alert to the risk of pickpockets and, as the now depressing familiar announcement goes, we make sure we “keep our personal belongings with us at all times. We are careful when going online and everyone seasoned web surfer knows how to spot a phishing attempt, so we ought to be pretty well equipped to repel attempts at fraud and theft. But how many of us consider whether we are protecting our houses from being stolen?
It sounds far-fetched; the idea that someone could steal bricks and mortar, but it is a very real crime and it is growing. Of course we are not talking here about someone coming along with a truck and physically carrying the building away, but rather a type of property fraud.
How Can a Person Steal My House?
What the fraudster is trying to achieve is not to take your house for himself to live in but rather, to raise money against it either by selling it or by obtaining a mortgage against it. He will impersonate you and will conduct a transaction in your name. Once it is completed he will disappear with the proceeds and leave you, and the unsuspecting buyer or mortgage lender, to deal with the aftermath.
Selling a House Without the Owner’s Knowledge
The more difficult type of fraud is to sell the property without the knowledge or consent of the true owners. This involves having regular access to the property and so usually a fraudster will target buy to let homes. He will rent the property using a false identity. This gives him a number of advantages. He can let potential buyers, and their valuers, into the property and pass himself off as the owner. He can answer questions about the property which only an owner or occupier would be able to easily answer and he can arrange for correspondence to be sent to the property addressed to the new owner. He might try and trick utility companies into redirecting bills to the property or request catalogues and such like in the name of the owner. This will help him obtain the documents he needs to fool a conveyancing solicitor into believing he is the owner.
He might then obtain a fake passport in the name of the owner or even just obtain a copy the owner’s birth certificate from the Registry Office, a fairly easy thing to do, and ring around some conveyancing solicitors to find one who will proceed without seeing photographic ID (he will explain that he doesn’t drive or travel abroad and so has no need of a passport or driver’s licence).
Once the sale is complete he will ask the solicitors to pay the money into his own account (which might have been opened in a false name), saying that it is the account of a friend or family member whom he is assisting or owes money. To reduce suspicion he might even forfeit some of the profits by having the solicitor produce a cheque made payable to the owner (which of course he will be unable to cash).
Mortgaging a House Without the Owner’s Consent
Another option is to take out a mortgage in the name of the owner. This is easiest if the fraudster knows the owner personally and gets hold of their identity documents but as outlined above, false documents can be obtained. Valuers, particularly where the mortgage advance is relatively small in comparison to the value, won’t always even want to go inside so if the fraudster cannot get access to the property he might arrange the valuation for a time when he knows there will be nobody home and hope the valuer just makes do with an external assessment. Alternatively he might target a property which is let to tenants. He can then accompany the valuer explaining he is an agent on behalf of the owner and is just remortgaging. The tenants will have no cause for suspicion.
Where Does the Owner Stand After the Fraud Has Been Committed?
This depends on whether the fraudulent transaction was a remortgage or a sale. The courts tend to be less sympathetic toward mortgage lenders than they are toward individuals therefore if it is a remortgage the courts may order that the new lender’s charge be declared void and removed from the property. There is no guarantee of this however and it will partly depend on whether there was a valid mortgage on the property originally. If so then this will have been paid off, so if the charge is simply removed the owner will have benefited, albeit unwittingly, from the fraud. The courts will need to decide how best to balance the interests of the two innocent parties – the owner and the lender – and this may mean the owner taking a new mortgage to cover the sum repaid on his old mortgage. This will not necessarily be on the same terms or with the same lender.
If the fraud involved actually selling the property, the courts have to think about the interests of the “purchaser” as well as the owner. It might even be that they will award possession to the purchaser, leaving the owner with no option but to try and track down the fraudster and make a claim against him. Either way, there is likely to be a long and expensive court battle.
How Can I Guard Against Property Fraud?
It is probably impossible to protect completely against this type of fraud, however there are steps that can be taken to reduce the risk:
- If letting a property always use a reputable letting agent, who will carry out the proper checks against potential tenants to help ensure they are who they say they are
- If there is a mortgage on the property, it will need to be repaid as part of the fraud which means a redemption statement will need to be obtained. Make a point therefore of checking with your lender no less than every 4 weeks whether a statement has been requested. If it has, you must immediately investigate.
- Consider entering a restriction on the title to the property to the effect that before a disposition can be registered a certificate must be obtained from a particular trusted person or organisation. Ideally it should be someone who is difficult to impersonate, such as a firm of solicitors (the Land Registry should expect the certificate to be on the firm’s letter headed paper) or a doctor’s surgery.
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