Over the past 5 years there has been an alarming increase in identity fraud relating to property in London. One such scenario is when property fraudsters identify a rental property and move in as tenants under false identities. They then procure a false identity for the owner and sell the property.
Some of the false identity documents are so good that they are very hard to detect as fraudulent. The conveyancing solicitors are duped and the sale proceeds to completion.
However there are some signs that should put innocent purchasers on guard.
I start with the end destination for the sale money. Fraudsters need to launder the stolen money. Sales that require sales monies to go to an account abroad are high risk. If a buyer is based abroad more caution should be applied.
Secondly, if the seller has pulled out of a transaction before – perhaps on detailed enquiries being raised - again the buyer should proceed with caution
Thirdly, if the sale is via an internet estate agent, the agent is less likely to have contact with the person purportedly selling, hence again alarms bells might ring.
Fourthly, if a property is on for below market price – or the seller looking for a quick sale – the deal might be too good to be true.
Fifthly, if the property is tenanted, but offered with vacant possession, it might be best to ask to speak to the letting agency and visit with the tenants in situ.
Finally, rental properties in a single name without a mortgage are particularly vulnerable.
In order to safeguard property yourself from a fraudulent transfer of your own property, it is recommended that your address registered at the Land Registry, is up to date. The Land Registry should write to that address to confirm the transaction is a good one prior to registration. If you have moved - perhaps the property was once your home and you are now renting it out - hence the address given is the property itself - you may not receive that notice.
If you delay objecting to the registration you might lose the property.
The innocent party – buyer or seller – who is the victim of such a fraud may have no means of recovering their loses other than suing the conveyancing lawyers. However, if the fraudulent identity document is very convincing then a solicitor who innocently facilitated the sale might have a defence against negligence. Who would have known? In those cases it will be necessary to revert to the Courts equitable jurisdiction. The law in such cases is complex and changing. In order to maximise the recovery of losses it is necessary to use specialist lawyers.