According to John Fitzsimons at LoveMoney.com, property title theft in the UK is costing the Land Registry a fortune in compensation.
Fitzsimons says that the Land Registry has confirmed that since 2006 it has handed over a staggering £26m in compensation to land owners who have fallen foul of property title fraud. Last year alone it handed over compensation of more than £4.5m.
So what is this costly fraud, and how do UK property owners protect themselves?
Use of forged documents to present themselves as the owners of the property to take loans against the property, leaving the actual owner with the repayments.
At Risk Categories
By moving all of the home ownership data online, it is now easy for someone to find out who owns your home, when you bought it and how much it cost. Some properties are far more likely targets than others, and these categories include some that will be an issue for foreign owners.
It is a lot easier if the property doesn’t have an existing mortgage. Unoccupied or tenanted properties are also particularly at risk, as it tends to be easier to intercept the mail. The Association of Residential Letting Agents has been urging landlords to contact the Land Registry to ensure that all notices and official communication is sent to an alternate address. Other properties at particular threat of title fraud are those undergoing redevelopment and high-value properties with an outstanding mortgage, but with the owner living overseas.
One of the factors that has potentially contributed to the growing issue of property title theft, according to Fitzsimons, is the change in the way that properties are registered with the Land Registry. Up until 2003, the Land Registry issued watermarked certificates as proof of ownership. Once an online system was introduced, these were scrapped.
Address for service
If you believe your property is potentially vulnerable, then the first thing you need to do is ensure that the ‘address for service’ that the Land Registry has for you is up to date. This is where the Land Registry will send all notices and letters. For further information check out this official guide from the Land Registry (opens as a PDF, you’ll need Adobe Acrobat to open it).
In short, insurance can be bought to guard against this type of fraud, but the Law Society feels they are not effective and ultimately pointless because it has, itself, established a fund for compensation. It suggests registering a restriction with the Land Registry which will cost you a one-off payment of £50, and means that the property cannot be mortgaged without the specific consent of either you or your conveyancer. Speak to your solicitor if considering this.
If you believe that you have already been the subject of such a fraud, or that the register has been changed so that you are no longer listed as the owner, then you must contact Land Registry immediately as well as contacting the police.
These are just the edited highlights of the article, you can find the piece in full here.