Property Title Fraud - What Is It? by Angie Newnham

Most have heard about the rise in identity theft which was recently highlighted by a report in the Observer online and hopefully we are all taking steps to minimize the chances of it occurring. But many will not be aware of property title fraud where fraudsters also steal legitimate property titles.

By impersonating the real owner of the property, such fraudsters can take out a mortgage on the property they do not own, keep the money thus leaving the real owners a huge mortgage and terrible debt to pay off.

Sadly, property title theft is also on the increase which has resulted in millions of pounds in compensation. One of the major difficulties with property title fraud is realising it has occurred since most owners have no idea what is happening until they try to sell their property, only to find that someone else has claimed title and re-mortgaged the property! In one particularly high-profile case, the Land Registry was required to pay out roughly £8million to two property developers who were fraudulently sold a 47-acre Berkshire estate. Four pensioners had lodged forged documents with the Land Registry, allowing them to masquerade as the owners and swindle £6.5million from the developers in 2004.

The Land Registry claims that the act of fraud is usually committed before they even become involved in the sale of a property. The majority of property frauds are perpetrated before registration: for example by impersonating the registered proprietor and obtaining a mortgage, a transaction which Land Registry would have no involvement with until after the money had been forwarded by the lender and the fraud had been successfully completed. However until 2003, watermarked land certificates were issued as proof of ownership, but these were done away with after the introduction of an online system.

What properties are being targeted by fraudsters?

Any property is a potential target but mortgage free, rental and unregistered properties are typical targets.

What can I do to prevent property title fraud?

Firstly keep your identity safe at all times ie signatures, bank details, statements, pin numbers, driving license etc. Such documents landing on the doormat of your buy to let property, rather than your home address is a typical cause. You could also speak to a specialist conveyancing solicitor who can assist you with updating your address for service details, or even place restrictions on the property, with the land registry. They will also be able to help you register your property with the land registry if it is currently un-registered.

What if I suspect my property title has been stolen?

Initially, checking with the Land Registry will confirm who the registered proprietors are and if there are any outstanding mortgages on the property. If this reveals other names or charges on the property you were not aware of, then you should contact specialist conveyancing solicitors or property lawyers who will be able to advise you accordingly. Property title fraud is a criminal offence and will involve the police and the land registry.