Chris Bovey, partner and residential conveyancing specialist at Bromsgrove-based law firm mfg Solicitors, examines the growing problem of property title fraud and argues why Midland property owners must be cautious of the Land Registry system.
It’s a little known fact that the Land Registry, the government department that chronicles property and land ownership in England and Wales, has paid out almost £30m over the past six years to compensate victims of a shady scam – property title fraud.
It’s a disturbing trend which in a nutshell, involves criminals taking out mortgages on properties they don’t own, fraudulently transferring the registered titles, taking the cash and leaving the real owner thousands of pounds in debt.
Perhaps it’s even more worrying that often the victims aren’t even aware they have been preyed upon by fraudsters until they come to sell their property many years later.
So, how can it happen? Well the most important point is that this government system has major flaws. It’s a publicly accessible system, a database which in today’s digital world, is all too easy to access or download documents and even have sight of the owner’s signature.
Land Registry statistics show that in 2010, 23 of 71 title fraud claims involved properties with an absent owner – either someone living abroad, taken into care for a long period or perhaps an owner with an extensive buy-to-let portfolio. These people continue to be more exposed than others.
Whatever the circumstances of the owner, there is no getting away from the fact that lodging a successful fraud claim with the Land Registry can be long and laborious and not as easy as people could be led to believe. A mountain of proof, coupled with a myriad of financial information must be presented to support any case.
But focusing on the positives, and with those hurdles aside, how can property owners seek help to combat this extraordinary nightmare?
In fairness to the Land Registry, they are now actively encouraging property owners to simply register a restriction which requires a solicitor to certify their identity as the owner before any sale or re-mortgage can take place. The government should be commended for finally making this move and more and more I am seeing people across the West Midlands taking the advice as the Westminster publicity machine undoubtedly helps increase the number of property owners protecting themselves.
But it’s also clear there are thousands of exposed owners across the region who risk their property portfolio by not registering. The rule is simple – register today to avoid problems tomorrow.
For further advice regarding property title fraud, Midlands Business News readers can call Chris on 01527 831691 or email firstname.lastname@example.org.
MFG Solicitors have an experienced residential team fronted by Peter Simner in Kidderminster, Andrew Davies in Shropshire, Chris Bovey in Bromsgrove and Worcester-based Sharon Lerry.