Why mortgage free properties should be registered
Sophisticated criminals continue to exploit flaws in the house purchase process to commit fraud. Recent cases suggest that they are specifically targeting mortgage-free properties.
Edward Donne, of Howden Insurance Brokers, says there is a simple step that letting agents and property managers can encourage landlords to complete to make this type of fraud harder to commit and to avoid a subsequent allegation of negligence.
A recent, well-publicised example of residential property fraud involved a £1.3 million house in Fulham that belonged to the wife of journalist and historian Max Hastings. Having established that the property was mortgage-free, criminals rented the property on a long lease, covertly assumed the identity of the owner and then sold the property before anyone realised that a fraud had been committed. Further information can be found using the link at the end of this article. This approach is not uncommon.
The fraudsters [or often their surrogates] will go as far as to change their name by Deed Poll to obtain a ‘legitimate’ passport and/or driving licence. Having obtained the necessary documentation, the fraudster then appoints an estate agent to sell the property. They will stipulate that they are only interested in cash buyers, avoiding the additional checks by a lender. The transaction will take place and the funds are sent to the ‘vendors’ bank account, which is almost always located overseas.
Because of these frauds, victims are now taking action against the professionals involved to recover, in many cases, very substantial funds. There is an increasing focus on the possible liability of the agents, especially where the agent has fulfilled the role of both letting agent and selling agent.
To protect the property owner and the professionals involved, any charge free property should be registered with the Land Registry Property Alert Service. The service is free to use and targeted at anyone who feels a registered property could be at risk from fraud.
Once registered, the owner receives an alert if any party applies to make changes to the ownership of their property.
Howden Insurance Brokers
020 7133 1247
This article was submitted to be published by Howden UK Group Limited as part of their advertising agreement with Today’s Conveyancer. The views expressed in this article are those of the submitter and not those of Today’s Conveyancer.