In an overheating housing market, can
conveyancers protect themselves and clients for this
When the system fails, nosy neighbours prevail - at
least in the case of one property hijack victim, an
elderly man going to stay in a care home. The fraudster
was his daughter (classy girl), spotting an easy
opportunity to make herself £340,000.
According to Today’s Conveyancer, cops, lenders and
conveyancers, were all none the wiser, until the
neighbours spotted removal men decanting the homeowner’s
worldly possessions into their truck.
The diabolical daughter got three years, but will no
doubt be out in one, if she starts to behave herself.
Not the biggest disincentive to misbehave, so when
combined with news last week that there are only 900
police officers to detect and investigate fraud in this
country, we need look no further to see why property
fraud is rising so quickly.
High profile cases, such as Dreamvar and property
development company P&P have helped to highlight the
issue and bring it to the fore, but this is a growing
problem that is escalating fast.
The Land Registry is certainly making every effort to
stop this happening. Their counter fraud unit works
closely with the police and other agencies to reduce the
risk of property fraud. They have prevented in excess of
£130M of attempted property fraud in this year alone. A
brilliant effort, given their meagre resources.
In the last 5 years, the number of successful cases has
tripled. In 2017, property fraud cost UK homeowners just
Who is most at risk?
Alasdair Lewis, director of legal services at the Land
Registry recently commented: “Property is a
high-value asset and therefore an attractive target
for fraudsters. Your property, even your family home,
can be sold and mortgaged to raise money without you
even knowing. Fixing the mess can be distressing,
time-consuming and costly.”
Common cases typically involve people selling
properties that they don’t own to innocent third
parties. Particularly at risk are mortgage free
homeowners, landlords and any home not registered at HM
Land Registry. Many properties are being advertised on
auction sites, such as eBay or Gumtree, but they are not
legally owned by the seller.
In the Dreamvar and P&P examples, the fraud carried
out was relatively simple. A person posed as a homeowner
through taking out a tenancy, then found a buyer,
engaged solicitors and made off with the cash. The owner
of the property had no idea it was going on. The
solicitors involved did nothing wrong it seems, all the
relevant checks were made, yet an innocent buyer was out
Recent cases have been more complicated.
There’s a trend for utilising multiple bank accounts
and clever marketing ploys or non-existent investment
schemes. In more extreme scams, fraudsters are hacking
into a buyer’s or solicitor’s email and asking for the
purchase money to be transferred to a different account.
Everyone puts a huge amount of pressure on conveyancing
solicitors to complete sales quickly. It’s a big part of
the overall problem. A committed fraudster can quite
easily obtain forged identity documents, making it
difficult to establish if people are who they say they
Court of Appeal rulings have concluded a fraudulent
seller’s solicitor may be held liable for losses to a
buyer. This emphasises the importance of thorough
Property hijack is an issue that shows no signs of
stopping, and with the overheated housing market is
likely to escalate further. Many cases still go
unreported and the effects on the victims can be
financially and emotionally devastating.
How homeowners can reduce the risk of becoming
The Land Registry launched a monitoring service called
Property Alert, which will notify you by email if there
has been certain activity involving the register of the
property. You can then decide whether or not the
activity is suspicious and take action. It is vital to
keep your contact details up to date. Then there is an
RQ request, which prevents the Land Registry from
registering any sale on the property unless it’s
certified by your solicitor.
These are certainly steps in the right direction, but
more needs to be done.
How conveyancers can protect themselves
In the Dreamvar case, the High Court judge David
Railton QC took into account the hardship the financial
loss would bring to them and deemed their legal firm
Mishcon de Reya to be in a better position to make good
the financial loss. It was a landmark decision which
rocked the property industry and the legal profession.
A combination of high quality legal services and
transactional “no-fault” insurance can pick up the
There is no simple solution to this issue and
fraudsters are continuously finding new ways to exploit
the housing market. Until the industry shuts down all
potential avenues, fraud insurance is the only effective
way to protect against this problem - for both
homeowners and their legal representatives.
To read more about our fraud policy click here.
To find out more, contact us on +44 (0)207 337 6461 or