How much of a threat is property fraud?
Property fraud in the UK is on the increase. You might not have even thought about it – the idea of a tenant selling your property right under your nose might not be something which has even occurred to you as a landlord. However, a recent survey showed that an estimated 6.5% of adults in England and Wales had been the victim of fraud in the previous 12 months. It is also a changing phenomenon – cyber-fraud is becoming ever more common as we become more dependent on computers and the internet in every area of our professional and personal lives. As a result, we all need to be more aware of the threat of fraud.
Property in the UK is increasingly valuable and is most people’s largest asset. This is particularly true in the buy-to-let sector, which is seeing a huge growth: landlords earned a combined £14.2bn in net income from rental properties between 2013-2014, and these figures have continued to grow. With sums like this involved, it is no surprise that the sector has drawn the attention of criminals seeking to profit from mistakes made by landlords.
The issue of fraud surrounding property has not generally been widely publicised until fairly recent cases hit the media. Several high-profile cases where properties have been sold by tenants posing as the owner have caught the attention of the press, acting as a warning to owners of property that this kind of crime is no longer a rarity.
One such landlord only became aware that he had fallen victim to property fraudsters after seeing his own property advertised for sale on a property website. He was lucky to spot the advert but others have been less fortunate.
Many landlords may be at risk of falling victim to fraudsters without even realising and as with all sorts of crime it can be very easy to assume that these things won’t happen to you. As such, it is important to be aware what the risk factors are. If this does happen it is likely to cost a great deal of money to get the situation resolved and require drawn out court proceedings. Therefore it is best to ensure that you are not caught out in the first place.
What are the risk factors for property fraud?
As with most kinds of fraud, some landlords are likely to be seen as ‘easy prey’ for fraudsters and swindlers. Generally, a healthy dose of common sense should keep you safe, but it is worth keeping in mind if you are particularly at risk.
Landlords who are most at risk of fraud include those who rent out their properties and live overseas. Living overseas away from your property naturally makes it harder to keep an eye on it, and to keep tabs on correspondence regarding it, meaning you might miss something suspicious or important.
Leaving your property empty can also make you more vulnerable to property fraud, as it is much easier for a fraudster to pretend a property is theirs if there is nobody else living there, or keeping an eye on the post.
Properties which are not mortgaged or registered with the Land Registry are also at risk, although these are increasingly uncommon.
Finally, most cases of property fraud are facilitated by identity theft, a crime which rose by a massive 57% last year. This is in no small part due to the increasing ease of access to people’s personal information online, be it via your social media profiles or through hackers stealing personal information from company databases and selling them to the highest bidder on the dark web. More conventional methods of identity theft still pose a high risk, such as the changing of names via deed poll and use of fake ID. If you know or suspect that you have been a victim of identity theft, you are far more likely to be at risk of losing your property to fraudsters.
How do I protect my property from fraud?
Fortunately, it is generally quite easy to safeguard your property against these scams:
- Stay vigilant for identity fraud – Whilst it may seem obvious, you should take care when it comes to your identity and the information available about you – or your property – online. Take any suspicious letters or emails seriously.
- Keep an eye on the Land Registry – It is simple and inexpensive to check your property on the register. Keep your details on the register up to date and make sure that the information on the register is current and correct – it can be easy to forget to change your contact details if you move house, and anyone can look at what address is associated with the property on the Land Registry. It is easy to make mistakes, and many landlords fail to register their personal property address correctly. It is all too common to register the owner’s address of the rental property as the rental property itself making fraud very easy indeed for an unscrupulous tenant.
- Sign up for property alerts – The Land Registry has introduced a new, easy, and free way to keep tabs on your properties. You can sign up to receive email alerts with the Property Alert Service whenever somebody interacts with your property on the register. This includes searches and applications made against the property, meaning that you know as soon as something suspicious takes place. The system is free to use and lets you monitor up to 10 properties. All landlords should have one or more alerts set up on their property.
- Restrict changes to your title – The Land Registry allows you to place a restriction on your title, meaning that nobody can register a sale or mortgage on your property without your signed certification from a solicitor or conveyancer. If you know you are particularly at risk of property and identity fraud, this could be a really important first step. Again the Land Registry does not charge for this restriction. While you can do this yourself you may wish to enlist the services of a conveyancing solicitor – we are able to offer this service at Anthony Gold.
It may seem like common sense, but being aware of the risks and following these simple steps can ensure that you never find yourself in the unfortunate situation of falling victim to property fraud.