Can my home really be stolen?

16 Mar 2011

Apparently the fraud is achieved by the property owner being impersonated (by a change of name or a fake ID) , and the fraudster then perhaps also uses that ID to then change the registered title deed correspondence address to that of the fraudster. In either case they then sell or even mortgage the property, yet the true owner is unaware. If the Buyer or Lender acts in ‘good faith’ the fraud can even be binding on the true owner! For example, you own property but do not live there. You rent it out. The tenant is a fraudster and changes their name to yours. They get their utility bills changed into their new name. They then appear to be the owner, living at the address, and so they can simply ask a conveyancer to sell the house. Who would know? The Sunday Express quote statistics that in 2009-10, the Land Registry paid £4.9million for 53 claims arising from fraud and forgery. However, the newspaper did not clarify whether these claims related to the subject matter of their report.

Thankfully as you can see, any such issue is minor at just a possible 53 per year, compared to millions of sales/purchases going to the Land Registry each year – the main reason for such low numbers being that solicitors have good checks in place, as do the Land Registry (see their Public Guide 17, 20 and Practice Guide 67).

But of course, even one case of fraud is too many.

So what can be done?

  • A simple answer could be for all property owners to ask their solicitor to enter a ‘Restriction’ on their Deeds to say essentially “no sale or mortgage without consent of my solicitor” . The solicitor could then make sure on any attempted sale or mortgage that their client was effecting it. But this does seem overkill based on the above statistics, and whether solicitors would be prepared to take the risk of giving the ultimate consent is another matter. A fee would naturally be charged for that service, and the lawyer bears a risk of getting the identity of their own client correct at some point in the future.
    Why a person’s solicitor (and perhaps even a password as a form of client/solicitor identification)? Why not a relative? The problem with the latter is that your relative could also be impersonated, but it is not as easy to impersonate the solicitor firm. Why? If you chose your mother for the consent, the fraudster could visit a conveyancer with their own ID and a letter purportedly signed by “your mother”. We suspect many conveyancers would accept that. But a conveyancer acting for the fraudster would need to write to the Law Firm themselves to get consent.
  • Living at your property is clearly a great form of protection, as you can see potential buyers coming around, or mortgage companies, and post comes to you.
  • But if you own your own house, and live away, then it depends on whether is it permanently empty – in which case let your neighbours will know you are away, and certainly have some sort of security against burglars let alone squatters intent on selling. In addition, make sure you update your address at the Land Registry so they can keep in touch with you at your right address.
    But if you live away and rent out the property this is where the problem seems to arise, as do you really know the tenant?
    However, even then, there are two practical barriers in the way of the fraudster:
    conveyancers will report potential money laundering at the slightest whiff of dodgy dealing, and the forger would not know their own conveyancer has done this until they receive a knock on the door from the Authorities.
  • All new clients must go through an ID check, and all conveyancers will scrutinise passports/photocard driving licences for where they have been issued/amended recently (i.e because of a possible name/address change). True, forged documents are out there, but any suspicion should be reported without telling the fraudster client.
    conveyancers will ID the solicitor on the other side of the transaction to make sure they are confident that it really is another lawyer they are dealing with, rather than simply rely on letterhead paper coming in. Even the land Registry stress this should be done, though they do point out that some conveyancers are failing in this regard.
  • A conveyancer should treat as potentially suspicious, any sale of a property by an owner living at an address different from the one given by the Land Registry for them. The conveyancer should ask them to change the address on the deeds to the one they are actually living at before the sale starts . If the client refuses to do it themselves, then that may also be suspicious. Conveyancers should be wary of doing the process for them if the solicitor does not know them personally.
  • To protect yourself, always use a reputable solicitor firm. One who shows they are on the ball and aware of this as a potential issue. Choosing a conveyancer who simply shouts that they are the cheapest, means less time may be spent on the detail.
    Having contacted the Land Registry following the Sunday Express’ report, they state that ‘if there is one message we would wish conveyancers to get to their customers – it is to keep their details (name and address) up to date and to remember that they can have up to 3 address for service, including an e-mail address on the register, which is perhaps the best way of ensuring that Land Registry notices alerting proprietors of changes to the register reach them.”