Property Transactions – how do solicitors protect you?
You may have seen a case of property fraud reported by the BBC, fraud within the property sector is unfortunately still a very real problem. In this case, the owner of a house was impersonated, the fraudster was able to sell the house, resulting in the true owner losing his home – the case goes on.
Incidences like this highlight the importance of property solicitors carrying out thorough due diligence on clients, to ensure that they are who they say they are.
Property Solicitors will usually agree to comply with the Law Society’s Code for Completion, which governs the process for completion of property transactions. This Code changed in 2019 as a result of the prevalence of cases involving property fraud by way of the seller being impersonated.
Property Solicitors acting in accordance with the Code, now undertake prior to completion that they have the authority from the true owner of the property that (1) they have been authorised by the true owner of the property title to receive the purchase price monies (2) that this person is entitled to convey that property title to someone else, under the terms of the contract.
Property Solicitors must therefore be alert to ‘alarm bells’ during property transactions and carry out rigorous due diligence to ensure that the client really is the true owner and entitled to sell the property. If it transpires after completion that the seller was a fraudster, the change to the Code now means that the seller’s solicitors are “on the hook”.
What can you do to protect yourself against property fraud?
Entering a restriction
You may wish to consider asking the Land Registry to enter a restriction against the title to your property, especially if any of the following apply:
- your property is empty
- your identity has been stolen
- you rent your property
- the property does not have a mortgage
- the property is owned by a company
A restriction can be used to prevent the Land Registry from registering a sale or a mortgage on your property, unless a solicitor or conveyancer has confirmed that they are satisfied that the person or company who executed the document submitted for registration is the same person as the proprietor (the person named on the title deeds).
While this would require you to take the additional step of obtaining such a certificate on a legitimate sale of your property, the benefits of doing so far outweigh the possible implications of a fraudulent impersonation of you.
Monitor changes to the register
The Land Registry also suggests signing up for property alerts. This means you would be notified if someone applies to change the register relating to your property. You can sign up for property alerts here.
If you need any assistance with registering a restriction against your title, or any other property advice, please contact Herrington Carmichael LLP.
This reflects the law at the date of publication and is written as a general guide. It does not contain definitive legal advice, which should be sought as appropriate in relation to a particular matter.
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