When she mentioned it to me, I too couldn’t believe
it, so that’s why I felt compelled to ask Donna
about the scam and write this article. Although Donna
is dealing with a very stressful situation, she’s
determined to bring some good out of her plight by launching
a campaign to raise public awareness and help stop this
happening to other people.
the incredible story…
and her best friend Amanda bought a buy-to-let property
from a trusted source in October 2010. It was a great
deal, with no work required to the property, and it
even came with an existing tenant. Problems first started
in December 2010 when the rent wasn’t paid and
after going through the correct procedures to access
and check the property, to their shock and horror they
found that the house had been systematically vandalised:
wires cut so high up in sockets and light switches
that it now requires a full re-wire
internal doors gone
of house painted black
some pictures of the damage (not for the faint hearted)
– I think you will see which ones are the after
Donna described the wrecked house as looking like “hell
on earth”. Luckily, Donna and Amanda had taken
out a comprehensive Landlord’s Insurance policy
for the property which covered malicious damage. A claim
was initiated and quotes gathered for the works to be
done, totaling £30,000!
this time Donna and Amanda were totally unaware of the
second, even BIGGER shock that was about to hit them…
the New Year they were notified of a police investigation
surrounding the house, not because of the malicious
damage – as they initially thought - but because
a man claiming to be the “real” owner of
the property had contacted the police to say that his
house had been sold without his knowledge or permission!
So if this man was telling the truth, then Donna and
Amanda had not only purchased a stolen house, but even
worse – they were now implicated in a fraud case
meaning that they swiftly went from being victims of
vandalism to defendants of fraud!
severity of this second shock soon hit home as they
began to ask themselves:
can we have bought a stolen house?
did everything correctly. We used a reputable firm
of solicitors so how could they have allowed this
solicitors that represented the seller were also a
respected local firm, so how could they have got it
the house is proven to be stolen, what happens to
the mortgage we have taken out – who is going
to repay it?
the case is investigated do we have to keep paying
and can we repair the damage to the house whilst the
investigation continues so that at least we can re-let
it to cover our monthly costs?
our insurers pay out if the house is suspected as
alleged real owner of the property has now applied to
the Land Registry to get the title back on the property.
Donna and Amanda have therefore had no choice but to
legally challenge this because they bought the property
in good faith and had taken out a mortgage to purchase
months down the line, they are no further forward. They
don’t know how or when their property nightmare
is going to end. So far it has cost them over £5,000
in civil litigation fees, with the prospect of more
legal costs looming in the future.
Donna and Amanda feel the situation is totally out of
their control, they have both taken action and are launching
a nationwide campaign with two objectives:
To make the general public aware of this new and fast
To suggest a solution to make the conveyancing process
the solicitors say:
MS LAW SOLICITORS have been selected to provide legal
support to the campaign
is what Mike Alexander of Alexander lawyers has to say
about this subject
“One of our clients has recently had a fairly
similar problem. Fortunately for that client the outcome
was slightly different, and that particular client is
left with a claim against the compensation fund run
by the Solicitors Regulatory Authority. Whilst that
particular client will recover their money, it is unlikely
they will recover their costs in full or the interest
they have had to pay out on money borrowed, but most
importantly they will never recover the damage to their
case has caused a number of discussions between my firm
and the Solicitors Regulatory Authority, and it appears
from those discussions that there is a high level of
fraud in the property industry. We are now at a point
where fraudsters are opening up branch offices as Solicitor’s
Practices fraudulently, as well as people selling properties
they do not own. It appears there are many different
frauds taking place, and it is quite correct that little
publicity is given to this.
reason for this I believe is very simple. You only need
to look at the new quality conveyancing system launched
by the Law Society. This is being launched under pressure
from the mortgage lenders in an effort to reduce fraud,
and will bring more regulation into the conveyancing
system at least for those Solicitors who join the scheme.
What is interesting to note is admission to the scheme
is dictated by a number of criteria. Right at the bottom
is the experience of the Solicitor involved, and it
follows from this that clearly mortgage lenders, Law
Society and others have little regard for the experience
of Solicitors in the property industry – they
are more interested in creating systems and stream lined
conveyancing processes that they believe the public
is this view point of Politicians, mortgage lenders,
the Law Society and many others that has created a fertile
garden for the fraud that is currently being undertaken.
What we now have is a public register of property titles,
that is open to anyone who has a computer. In short
you can go on line to the Land Registry and draw down
a significant amount of information about an individual
property – who owns it etc, etc. This gives the
fraudster everything they need, and a few other simple
checks will identify properties that are occupied by
tenants and a few enquiries will identify properties
of this nature where the owners are living abroad for
one reason or another. That is then, frankly, all the
fraudster needs. He can then masquerade as the owner
of the property, seek to sell it subject to the existing
tenancy, with the full knowledge there are many potential
purchasers out there who want to buy this type of product
because they get a far better return than the money
in the Bank in the current economic climate! He also
has the knowledge that if he carries out his checks
correctly then the first the owner will know about it
will be in 6 months time or something like that when
they come back to this country.
we are dealing with fraudsters here it is not difficult
to falsify passports and other proof of address details
that are needed and requested by any reputable firm
of Solicitors. At the end of the day however good or
weak the Solicitor’s system is, the Solicitors
are not trained and indeed are not responsible for fraudsters,
and would not necessarily spot a fraudulent passport
unless it was a really bad copy! It follows therefore
that rightly or wrongly the view that has been taken
in this country is that the public wants a stream lined
fast conveyancing service. The ease in which information
can be obtained electronically now is therefore a fertile
feeding ground for fraud and this is a risk that cannot
and will not be avoided in my view and is now here to
stay unless in the very unlikely event that Politian’s
decide to change the systems we are currently working
with. It follows therefore that the solution to the
problem must lie in insurance cover, and all buyers
of property must become less cash conscious and stop
looking for the cheapest deal. The public must be educated
to understand that buying a property is the biggest
purchase of their lives normally, and they should therefore
do and spend what is necessary to protect that purchase,
and that will include in the future purchasing insurance
that will protect them against this type of situation”
is what Richard Spencer of BPE has to say about this
Fortunately, I haven’t had first-hand experience
of any fraudulent cases but, whilst shocked to hear
Donna and Amanda’s story, I’m not that surprised.
As anybody can access the Land Registry’s title
register, it is hardly surprising that criminals are
taking advantage. We can’t search the Passport
Agency or DVLA’s register, so why can we search
the register which records ownership of the most valuable
assets we own?
protect against fraud and money laundering, solicitors
must obtain identification for all new clients and a
good firm will not rely on photocopies. As Dean says,
we’re not qualified to spot forged ID but we do
offer electronic ID checks in addition to obtaining
original ID. These checks will verify the client’s
name against several registers including the passport
agency, DVLA, electoral roll and others. If any of the
original documents have been stolen or the supplied
ID is fake, the online system should alert us. The system
will only work if the documents are fake or the relevant
agency is aware that an original document has been lost
or stolen. In Donna and Amanda’s case, the owner
of the document did not know his identity has been stolen,
so the online ID checker would not have notified the
simple action all investors should take is to notify
the Land Registry of three addresses for service, two
of which can be email addresses. If anybody attempts
to alter your title, you should receive an email from
the Land Registry.
solution, albeit an unpopular one due to cost, is to
take out a title insurance policy at the time of purchase.
For a one-off premium of around £100, you can
obtain cover of up to £250,000 against a number
of risks including identity fraud. Investors should
check if their existing insurance policy covers such
risks before paying for an additional policy.
is what Paul Ribbons Expert property Trader has to say
on the matter
was flabbergasted when I heard of Donna’s predicament,
in 25 years I have never heard of anything like this.
When hearing the news I spoke to my lawyer who confirmed
this is a crime that is growing fast due to electronic
procedures and its costing many buyers Thousands of
pounds, thief’s are very sophisticated now a days.
It makes it very hard for people to have faith in a
system that is obviously flawed and needs to be updated
to keep up with modern practices. We must pull together
to try and prevent this happening in the future to others.
I pledge my support to your cause Donna.
Since the Electronic Title Deed became available to
download in 2003, this cost of this fraud has increased
tenfold. In 2004-05 there were 15 cases reported by
the Land Registry which resulted in them paying out
£491,656 in compensation, in 2009-10 this increased
to 53 claims resulting in the Land Registry having to
pay out £4.9million.
can you protect yourself?
Fraudsters tend to target properties that have no mortgages
on them, so if you own a property that without a mortgage,
Donna’s research on the internet suggests to protect
yourself that you get a solicitor that you know and
trust to enter a restriction on your title deed. By
doing this, if someone does attempt to sell your house
they will not be able to until the restriction is removed
from your title deed, and you would have to give your
permission for this to happen. So by doing this you
can stop any potential fraudster in their tracks.
can you help?
raise awareness of this rapidly growing fraud and the
trauma that it causes to innocent victims, Donna and
Amanda have launched a website: www.stolenhomes.co.uk.
Here you will be able to find out more information about
this fraud, with articles from other people who it has
happened to and their experiences. You can also listen
to an audio recording of Andy, another property investor
who was also a victim of this type of fraud.
tell all of your friends and contacts about the www.stolenhomes.co.uk
website. On the website you will see that there is a
petition, please do sign this petition and get as many
people as you can to do the same. Donnas' MP Chris Kelly
is fully supporting this campaign and is liaising with
Lord McNally’s office at the MoJ, the Minister
responsible for HM Land Registry and looking to take
this to Parliament for them to put more stringent steps
in place to protect buyers and sellers.
says: “Something has to be done urgently to make
the conveyancing process more robust and to stop fraudsters
getting away with this crime, leaving innocent victims
to carry the financial cost and emotional trauma of
dealing with the consequences”.
the property remains uninhabitable as the insurance
claim for the malicious damage is on hold because of
the dispute over the title. Donna and Amanda still have
to pay the mortgage and more funds have to be found
for the on-going legal representation in the dispute,
with no immediate sign of light at the end of the tunnel.
Meanwhile the pair are focusing on publicising this
little-known scam with the hope of preventing anyone
else becoming a victim.