Home » How to protect buy to lets against property fraud

How to protect buy to lets against property fraud

identity theft collage for landlords property fraud with fraudster running off with house

Landlords are at particular risk of property fraud for their buy to let properties, and this blog post looks as why this is so and what landlords can do to reduce the risk.

What is property fraud?

Property fraud, also called “property hijacking” can happen when a fraudster impersonates the person who is listed on the Proprietorship Register of the Land Registry’s Official Copies, and holds themselves out as the legal owner of the property before “selling” or mortgaging it.

According to HM Land Registry’s 2022-23 Annual Report, they paid out £3.5m in 2022-23 against 627 claims of property fraud, and £6.6m in 2021-22. It’s a big problem.

Here is an example of the steps that a property fraudster may take to carry out fraud:

  • Assume the identity of the owner of a registered property through identity fraud and fake ID.
  • With their new ID, they trick property professionals (solicitors, lenders, estate agents or mortgage brokers) that they are the person listed on the Proprietorship Register of HM Land Registry’s Official Copies of the property’s title.
  • The fraudsters puts the house up for sale or mortgages the property, before disappearing with the cash.
  • The real owner discovers the fraud when they stop receiving rent or they see someone else is living there.

Why is property fraud a problem for landlords?

Property fraud can be a problem for unincorporated landlords if the address of the Registered Proprietor with HM Land Registry is the address of the property itself, and not the home address of the landlord. This happens with accidental landlords who were previously living there, or if the solicitors were lax and didn’t use the home address of the landlord. It’s also an issue for landlords who don’t have a mortgage.

Anyone can check the title deeds of a property at HM Land Registry, and then pose as a tenant in order to intercept post and carry out identity theft. The owner won’t know anything about it, as the post will be going to the rental property, and not to their own address.

Here’s a scenario involving property fraud by a tenant:

  • Tenant takes out a loan in the landlord’s name and defaults on the payments.
  • A charging order is registered against the property.
  • It comes to light after the tenant has moved on, and the debt has been sold.

What can landlords do to reduce the risk of property fraud?

row of houses with fraud alert to stand for buy to let property fraud alert service

1. Set up a free Property Alert with HM Land Registry

This is the easiest way for a landlord to prevent property fraud. You can sign up to HM Land Registry’s free Property Alert Service online and to receive email alerts when they receive official searches and applications against up to 10 monitored properties. This will let you know that someone is either investigating or actively looking at committing property fraud.

2. Check the address of the registered proprietor is the landlord’s home address

Make sure that the address of the registered proprietor in the Proprietor Register of the Register of Title has your home address, or the registered office if the owner is a limited company. If it’s not, it’s easy to change it by completing and returning Form COG1 to HM Land Registry. It’s free to do this, and you don’t need to use a solicitor to submit the form.

It’s also important to keep the address up to date if you move house or change the address of the registered office.

3. Put a restriction on the title with HM Land Registry

If landlords or a limited company owners don’t have a mortgage, there won’t be a restriction on the property’s title to stop HM Land Registry registering a sale or mortgage on your property. It’s easy for landlords to put a restriction on the title by using Form RQ if you bought the property in your own name, and Form RQ (Co) if a limited company owns the property. There is no cost of doing this and you can even email the form to HM Land Registry. This free service is available for when the registered proprietor is not living at the property.

Be aware that you’ll need to have a solicitor or conveyancer apply to remove the restriction, which might cause a delay when you sell or re-mortgage the property.

>> Related Post: How to avoid fake or rogue letting agents

identity theft collage for landlords property fraud with fraudster running off with house
Scroll to Top