Fraudulent Property Transactions ' What Can Be Done?

• Published date: 24 November 2021
• Subject Matter: Real Estate and Construction, Criminal Law, Conveyancing, White Collar Crime, Anti-Corruption & Fraud
• Law Firm: Russell-Cooke Solicitors
• Author: Harriet Allsop, Ed Cracknell, Donall Murphy and Bryony Shawe

The recent news story of Reverend Mike Hall demonstrates how sophisticated fraudsters can impersonate a property owner's identity and, ultimately, change the legal ownership of a property at the Land Registry and sell it as their own.

Reverend Hall had been working in North Wales when he received a call from his neighbours telling him that someone was in his Luton home. Reverend Hall drove back to the property and found that the locks had been changed and that there was a man inside carrying out building works. All the furnishings had been removed from the property.

It was established that Reverend Hall's driving licence had been cloned and a bank account set up in his name by the 'sellers' in order to receive the sale proceeds. The property was sold to the new owner for '131,000. Reverend Hall checked the title deeds of the property on the Land Registry and found that it had indeed been registered in the new owner's name. A man has since been arrested on suspicion of fraud by false representation.

Reverend Hall's story is unnerving. But what can property owners do to try and prevent this happening to them?

Case law

There have been a number of recent cases on property fraud. Un-mortgaged properties, or properties uninhabited by the owner, are the most susceptible. The courts have held that the conveyancers acting for both buyer and seller can be held as equally liable for protecting clients' money (Purrunsin v A'Court and Another [2016]).

The most well-known recent case is the linked appeal of Dreamvar (UK) Ltd v Mishcon de Reya and P&P Property Ltd v Owen White and Catlin LLP. Mishcon acted for the purchaser. Despite having complied with its obligations in terms of anti-money laundering and other checks (see below) and having acted correctly throughout the transaction, Mishcon was found liable because the purchase funds were sent to the seller's solicitors when a "genuine completion" had not taken place. A genuine completion had not occurred because the transaction had not taken place with the true registered proprietor of the property.

Sophisticated frauds may be difficult or impossible to spot, but conveyancing solicitors are the first line of defence.

Property alert

A simple thing you can do to prevent property fraud, especially if you own property that you don't occupy, is to set up a property alert via the gov.uk website. This is very easy to do, it's free, and you can do it online in just a few minutes.

Once the alert is set up, you'll receive a...