UK Land Registry Suffocating From Property Fraud Claims

Property fraud has become a major problem across the country as research has revealed the UK Land Registry has received twice as many property fraud claims that they are able to prevent since 2009.

Property scams are a serious ever-evolving issue in the UK, with millions lost each year. Through a freedom of information request to the Land Registry, ABC Finance has found that the UK could be in a property fraud crisis.

The data showed that property cons are by far the most common occurrence of fraud reported by the UK’s local authorities.

In 2018 71% of fraud was property fraud- valued at £216m. Over the past decade, the Land Registry has paid £73.3m, with a total number of 678 claims.

One high profile case from 2017 demonstrates how property fraud can happen. The court case of Laylah De Cruz and her mother Moorcroft highlights the importance of taking steps to protect property from fraud.

This month, The Law Society supported its members by providing guidance on property fraud, advising on what to look out for and steps to help tackle the issues here.

With the Land Registry not just restricted to property professionals and open to the public (or a potential fraudster), we asked property professionals whether open access to the Land Registry makes it easier for property fraudsters to perpetrate their crimes….

John Jones, Head of Conveyancing at BBH Legal Services Limited said:

“I have always been supportive of open access to the Land Registry. Transparency of ownership is important in modern society. However, I do agree that such openness, without safeguards being built-in, leads to the system being abused and providing fraudsters with opportunities to further their illegal aims.

“At present, a member of the public can obtain Land Registry records by providing an email address and a debit or credit card details. Given that fraudsters appear to be very good at manipulating (i.e. hacking into) emails and can no doubt make use of stolen or fake debit/credit cards, this way of obtaining information is of little use as a deterrent to fraudsters nor will it give any true audit trail if attempts were made to trace that person.

“Businesses, such as law firms, lenders and search providers must go through a more detailed registration process to obtain Land Registry information, usually through the portal or business gateway. This provides a clear audit trail.

“In my view, members of the public, must be traceable and provide a reason why they need the information. Their identity must be ascertainable and confirmed before requesting Land Registry information. I am hesitant about creating another layer of bureaucracy but they should be required to go through GOV.UK Verify registration before approaching the Land Registry. By giving their Verify password and a reason why the Land Registry will feel more assured that they are dealing with a request from a genuinely interested party. Even with this approach, I am sure that the fraudsters will eventually find a way around it but we have to make it more difficult for them as best we can whilst keeping the process straightforward for genuine persons to get the information they are seeking.”

Paul Sams, Partner at Dutton Gregory Solicitors said:

“As with everything in life, there are a small number of people who do things wrong in this world. The actions of a few come to the attention of the majority. The Land Registry contains matters that in my opinion should be open to the public record and to restrict that would be wrong.

“Fraudsters have been around since the beginning of time. If access was restricted to title information they would find a way around it. It is what determined fraudsters do. No matter how many hurdles we place in their way they will find a way or try to find a way to climb over them.

“We in the profession just need to remain vigilant and to protect our clients as best we can. We all know best practice and should follow it but no system is infallible. If we restrict access there are people who, sadly, have been in the profession who would use their restricted access to help permit financial crimes so I am not sure that is the solution.”

Today's Conveyancer