A new way to help prevent property fraud.
HMLR's new restriction registration service
Property fraud is estimated to cost the economy up to £70bn annually. HM Land Registry’s own data shows that since 2009 they have prevented frauds on over 160 applications on properties valued in excess of £70m.
There are a number of known types of property fraud and countless that are yet to be discovered. Fraudsters may impersonate the registered owner of property in order to raise mortgage finance and then disappear with the money. The first time the fraud comes to light is when the mortgage company take steps to repossess the property. Another example is where fraudsters use a forged document to acquire ownership of a property and then sell it to an unsuspecting buyer. Property fraud is targeted at both inpidual and corporate owners of property.
Following a successful pilot, HM Land Registry last month rolled out a new counter-fraud measure to further help prevent fraud relating to properties owned by companies. This new measure is in addition to the existing free ‘Property Alert Service’ which allows company owners of property to register details of up to 10 properties with HM Land Registry and will then be emailed by them if anyone makes an official search or application against one of those 10 properties.
This new service means that company owners of property can now make an application to HM Land Registry for a restriction to be registered against their property using Form RQ(Co). There is no HM land Registry fee for this application for the first 3 of the company’s properties and it will result in a restriction being registered against the title for the company’s property in the following form:
“No disposition of the registered estate by the proprietor of the registered estate is to be completed by registration without a certificate signed by a conveyancer that the conveyancer is satisfied that (1) the company which executed the document submitted for registration as disponor is the same company as the proprietor, and (2) reasonable steps have been taken to establish that each person who signed as an officer of the company held the stated office at the time of execution.”
The registration of this restriction helps to prevent the use of forged documents as it requires a conveyancer to certify that they are satisfied that the company selling or mortgaging the property is the same company as the owner of the property as well as certifying that they have checked that the officer of the company is indeed registered as such at Companies House. The need for the involvement of a conveyancer adds a further hurdle for a potential fraudster.
Managing agents and letting agents that service the needs of company landlord clients should consider, as part of the added value service that they provide to their clients, making use of both HM Land Registry’s existing ‘Property Alert’ service and this new restriction registration service so as to help prevent property fraud on their company client’s property.
Managing agents and letting agents that service the needs of company landlord clients should consider, as part of the added value service that they provide to their clients, making use of both HM Land Registry’s existing ‘Property Alert’ service and this new restriction registration service so as to help prevent property fraud on their company client’s property.