Your property is probably your most valuable asset, therefore it is a very attractive target for ownership crime. The reported value of rental frauds in 2016 matched a total amount of nearly £2.5 million. This is a growing trend which shows no signs of abating, so how would you protect yourselves and your tenants? What should set the alarm ringing? Here we look at some of the most common property frauds and tips to safeguard your business.
You are more vulnerable to property fraud if your property is:
- Rented out
- Empty – perhaps the owner may be living abroad or in a care home
- Mortgage-free, so no bank or building society has an interest
- Not registered with the Land Registry
According to experts at the Land Registry, buy-to-let landlords, owners of mortgage free properties and those living abroad are particularly at risk of a scam involving fraudsters stealing their identity to sell or mortgage the property without them knowing. They then disappear, frequently changing their names leaving the true homeowner to deal with the consequences. To tackle this problem, the Government’s Land Registry department has set up a Property Alert scheme to prevent such frauds. Homeowners and landlords can register their details and get an email alert when there is activity on the property, such as a mortgage being taken out against it or a change of ownership details. The recipients can then decide how to react in case the activity looks suspicious. If you feel your property might be at risk you can also have a restriction placed on your property. A restriction is intended to prevent fraudulent activity such as the transfer of a mortgage, unless a solicitor confirms the application was made by the rightful owner.
In one scam someone posing as a tenant will answer an ad for an online property and ask to pay by Western Union or a similar service. They then “accidentally” pay too much, apologise and ask for the money to be returned. The original payment will bounce and the fake tenant will receive the “repayment”.
Fake payment invoice
In recent months the National Fraud Intelligence Bureau has received a high number of reports about emails containing a piece of malware claiming to be an invoice or containing details of transactions. According to the Bureau the specific wording of the email is new and convincing, contains details of a fake order which appear to have been sent by a legitimate company. The payment method is described as a credit card payment, with details of a fake transaction number. The email will then state that the recipient can find more information on the purchase in the attached file, however opening the attachment will infect your computer with malware. The telephone numbers provided at the bottom of the email are not genuine and are often connected to people that are unaware that their email is being used.
Are you prepared to act to protect your property? We have a few tips to get you covered:
Sign up to the Land Registry Property Alert service:
If you think you might be at risk of property fraud, the first thing you should do is to sign up to the Land Registry Property Alert service.
Alerts are sent to you via email when official searches and applications are received against the property you want monitored.
So, for example, if someone tries to make changes to a property you have registered – such as applying to change the registered owner of your property – a notification is sent to you via email.
It won’t automatically block any changes to the register but it will tell you what is happening so you can take appropriate action if necessary.
It’s a good service for landlords too, as you can monitor up to ten properties at one time free of charge.
Put a restriction on your title
You can safeguard your property further by applying to put a restriction against the title that no sale or remortgage of the property is to be registered without a certificate signed by a conveyancer.
Be wary of fake emails
Do not click on any attachments or links within an email unless you are sure that you know who has sent them. Always check the legitimacy of the email with the company that has supposedly sent it.
Some fraudsters have intercepted emails between solicitors and their clients and substituted fraudulent bank details. Some people have unwittingly sent money meant for their house purchase to criminals rather than their own solicitor. If you are notified of a change to a solicitor’s bank details then telephone the solicitor and speak to someone whose voice you recognise to check this.
Know your tenant:
The best advice we can give to landlords and letting agents to avoid becoming victims of property fraud is to know their tenants. Always attend viewings with clients, never release keys (particularly regarding void properties) and never allow anyone to stay after you leave. Fraudsters might take an imprint of the key and get it cloned later. Make sure you are there and you can verify the details of the people moving into your property, don’t just rely on the letting agent.
As a landlord expanding their existing property portfolio, the importance of keeping properties under detailed control is key to safeguard them from fraudulent agents and to ensure that they are managed effectively.
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