Frustrating Property Fraud

In England and Wales the Land Registry system is open to public view. Since October 2003 the Land Registry has dispensed with paper land certificates and scanned documents have replaced original documents in online applications to the Land Registry to register a dealing. From this summer original documents are no longer required with postal applications. Many conveyancers are concerned that, with these changes, property fraud is going to increase.

Who is particularly vulnerable to fraud?

Anyone can be the victim of fraud, but there are certain categories of people and property more vulnerable than others:

owners who do not live at their property (eg, elderly owners who have moved into care homes, those working abroad, a co-owner who has moved out following a break-up with a partner and holiday home owners); personal representatives where the owner has died and the property is vacant; anyone who has already been the victim of identity fraud; vacant properties, properties undergoing redevelopment, properties with no mortgage and tenanted properties; and unregistered property. Fraud is more easily perpetrated in the situations where the owner is not living at the property, as the address for the registered proprietor on the register may not be up to date, so that notices from the Land Registry do not reach the owner.

Recent examples

Fraudulent transactions usually include an element of identity fraud and fraudulent documents being presented to the Land Registry. In addition, they will also often include either a "rogue" conveyancer in a bona fide law firm, a "bogus" law firm, or a fictitious branch office of a bona fide law firm.

In Swift 1st Ltd v Chief Land Registrar [2014] PLSCS 40 a lender was tricked into making a loan secured on a registered property not owned by the borrower. The fraud was uncovered only when the lender served possession proceedings for mortgage arrears on the bewildered registered proprietor.

In Lloyds TSB Bank plc v Markandan & Uddin [2012] EWCA Civ 65; [2012] PLSCS 27 fraudsters went to great lengths in an elaborate scheme where a fraudulent buyer/borrower (represented by a genuine firm) was in cahoots with a bogus branch office of a genuine law firm, purporting to act for the registered proprietor selling the property.

Key points for property owners concerned about fraud

Apply for voluntary registration of any unregistered land. Ensure that the address(es) for the registered proprietor are kept up to date. Consider...