The last five years have seen an increase in the number of fraudulent property transactions reported in both the commercial and residential property sectors.

Criminals seek to exploit vacant properties by selling or letting them fraudulently. These attacks often include impersonating the registered owner or presenting forged documents to transfer the property into the criminal’s own name. For example, a fraudster might move into a rental property as a tenant and then sell the property, duping conveyancing solicitors by using a false identity. Another example is when criminals, purporting to be the landlord of a vacant property, defraud innocent prospective tenants who pay a deposit to secure a tenancy only for the fraudsters to disappear with the money.

Although the Land Registry will indemnify those who suffer loss owing to mistakes on the register, no indemnity is payable if the loss results from the claimant's lack of care, meaning land owners need to take some responsibility for protecting their properties from fraud. It is, therefore, imperative that property owners accurately maintain their address for service at the Land Registry so that they promptly receive notice of any applications made which affect their title. The Land Registry should write to that address to confirm the transaction prior to registration.

If you have moved address or changed your name, such as on marriage or on entering into a civil partnership, you may not receive that notice. You can have up to three addresses for service, in any combination. For example, your current address, an email address and an address abroad. Email addresses are ideal for prompt notification.

Land owners with unregistered titles are advised to consider voluntary first registration to prevent fraudulent dealings by criminals claiming the unregistered deeds have been lost.

How to prevent property fraud

Land owners should carry out regular inspections of their properties, particularly those with a property portfolio. Vacant properties should be adequately secured and frequently monitored.

Fraudsters need to launder their dirty money. Property sales that require funds to be sent to an account abroad are high risk. If a party is based abroad, caution should be applied. If the sale is via an internet estate agent, the agent is less likely to have contact with the person purportedly selling and extra caution should be exercised. If the sale price is below market value, or if the seller is pressurising for a quick sale, then the deal may well be too good to be true.

Ideally, tenants should only seek to let via a reputable letting agent who should have carried out due diligence on the landlord. If no agent is involved, tenants should carry out due diligence themselves before committing to a tenancy.  Checks should be carried out at the Land Registry and Companies House (if appropriate) to ascertain the true identity of the landlord. Do not be afraid to ask for proof of identity. A genuine landlord will understand. Even where a reputable commercial or residential agent is acting, advice should be taken on the nature of the agreement to ensure that security of tenure is not compromised before monies are handed over.

Ultimately, knowledge is power when it comes to minimising the threat of property fraud. Without this knowledge, property owners and tenants could find themselves the victims of significant financial losses.