Property and land is often the most valuable asset people own. It is therefore a target for fraudsters. It is especially vulnerable where:
- it is empty or let
- the owner is abroad or absent
- the owner is infirm or has lost mental capacity.
Steps can be taken to protect property and land in these circumstances.
Where the property owner’s title is unregistered – and Land Registry statistics indicate that 30% of the titles to land in England and Wales remain unregistered, voluntary registration of the title should be considered.
The benefits are:
- it is more difficult for a squatter to obtain adverse possession against a registered title than a non- registered title;
- registration confers the benefit of a State-backed security of title – depending on the circumstances of loss suffered as a result of fraud, it may be possible to receive compensation from the Land Registry. The availability of compensation is limited according to the circumstances of the fraud. Compensation may be reduced where loss is suffered as a result of proper care by the owner;
- registration can simplify the conveyancing process, thereby reducing costs;
- some buyers are reassured by the title already having been registered;
- registering the title provides an up-to-date official record of who owns the registered title to land in England and Wales.
Once registered steps should be taken to protect the registered owner’s interest by:
- notifying the Land Registry of any change of name;
- maintaining the correct address for the registered owner. The Land Registry requires an 'address for service.' This is an address to which the Registry will send letters and notices if they need to contact the registered owner. For example, where the Registry has received an application concerning the property. An incorrect name or address may mean that the owner does not receive letters or notices from the Registry.
Up to three addresses for service may be included on the register. One of these must be a postal address but does not have to be in the UK. The other two addresses can include an e-mail address;
- additional protection to the registered owner can be afforded by means of the registration of a restriction.
A restriction is an entry in the register that limits the ability of the registered owner of the land to deal with or dispose of the land. These limitations may be for an indefinite or specified period and may be absolute or conditional on something happening (for example, the consent of a third party being obtained).
Registering a 'restriction as to evidence of execution' may make fraud more difficult. Where this restriction has been registered, the Land Registry will not register for example a transfer of ownership or mortgage unless a solicitor or other professional conveyancer has certified that they have checked the identity of the person who has signed the transfer deed or mortgage deed. This could help prevent a fraudster forging an owner’s signature on the transfer deed or mortgage deed.
There are numerous restrictions which can be registered. Some are in standard form and others are drafted to suit the circumstance of the individual owners.
Consideration should be given to the preparation of bespoke restrictions to protect the interests of vulnerable owners, for example where a sole registered owner has lost mental capacity or where the registered owner has died leaving the property empty.