In an effort to increase security measures and as additional protection against the possibility of fraud, the UK Land Registry has introduced a new restriction which requires a solicitor to certify the identity of a seller to the Land Registry before the property can be mortgaged or sold.
This new restriction is thought to be especially important for those on the Channel Islands and other investors overseas buying or selling property in England or Wales.
According to the Law Society, expensive or high-value properties without a mortgage, or with an outstanding mortgage where the owner resides abroad, are particularly vulnerable to title fraud. Without the owner’s presence in the country, the threat of fraud understandably rises.
Michael Morris, UK property expert at Collas Crill, spoke to Isle News about the problem of fraud: “Property fraud is surprisingly simple. We have seen property fraudsters use forged documents to represent themselves as the owner of the property.
“All they need to do is then register the forged documentation at the Land Registry and, once this is done, can sell the property from under the feet of the genuine owner, or take out loans against the property. The fraudsters then pocket the cash and leave the property owner saddled with debt, of which they may be unaware until they try to sell the house and then discover several mortgages.”
He highlighted that houses which are empty whilst their owner remains abroad, or those with tenants and an overseas landlord, are all more vulnerable to fraud.
However, it is not only property investors abroad who need to be aware that they are at risk of this fraud; the Land Registry’s more stringent new measure also “provides an additional layer of protection and control for trustees owning land in England. It means that a beneficiary of the trust cannot deal with the land without the trustees’ knowledge,” Mr Morris continued.