Skip to main content

Conveyancers Duped by Million Pound Property Fraud - Was it Avoidable?

The news of a property fraud reported in the Daily Mail ( ) at the weekend should send a chill down the back of all conveyancers across the land. 

A young woman — who paid the full amount with no mortgage — had been duped into handing over £1.35 million to the a person purporting to be the legal owner of the property. 

The money was last seen on its way to a bank in Dubai.

The real owner was totally oblivious to the fraud until the Land Registry smelling a rat declined to register the property in the name of the young woman. 

There were two primary fraudsters.  One who took out a rental agreement on the property before the property was placed on the market, and the other who stole the identity of the real owner.  Between them they were able to fool the letting agent, the selling agent and both the selling and buying conveyancers. 

This was a fraud perpetrated at the highest level.  

So what could have been done to prevent it?  Probably not very much given the sophistication of the perpetrators. 

The question of whether negligence lies with either the seller or the buyer’s conveyancers must also be a vexed issue. 

So what lessons as conveyancers can we learn from these circumstances?

From a sale perspective there was nothing on the surface which would have alerted the seller’s conveyancer.  The ID supplied for the registered owner, that is the seller, was fake but unless it was obviously fake there was not much more one could expect the seller to do to identify the fraudulent  activity. 

Interestingly, had the seller made use of the Land Registry Alert procedure there is a possibility that the true owner would have been alerted about the proposed sale when the purchaser  undertook the OS1 search before exchange. Clearly conveyancers should all be advising buyer clients, especially the Buy To Let clients, to register for this type of alert. Failure to do so may in the future be viewed as a negligent omission. 

So what additional checks or alert factors should conveyancers as result of this incident consider?

Property of high value with no mortgage are at highest risk especially if they are rental properties. Conveyancers dealing with this type of property should perhaps check on the internet to see whether the property has been advertised for let recently.  In this case the fraudster tenant had only just taken out a rental agreement and had, which is unusual, paid the rent in cash. 

If instructed on this type property perhaps conveyancers should also look at the ID documents more closely and always arrange for the file to be referred to a senior member of staff for a second review. 

Suspicion should be heightened if the registered proprietor is abroad and there is a third party purporting to act for the owner. In this case the property had been put on the market purportedly on behalf of the owner by the person who had taken out the rental agreement.  Its unknown whether this was known to the seller’s conveyancer. 

Another alert factor is the instruction for the sale proceeds to be transferred to an account based outside of the Country.  If a conveyancer is instructed to transfer any funds abroad following a sale, there is now, I would suggest a strong, good argument  to pause and to take a more detailed look at the circumstances.  At the very least, the transfer should be referred to a Partner or other senior colleague for checking. 

So in short conveyancers acting in transactions of this type should keep a close eye on transactions involving:

Property with high value with no mortgage of other charge 

Property where the seller is shown as living at an address which is different from that of the property

A seller looking to sell through an intermediary

The transfer of funds to an account held abroad.

From a buyer's perspective perhaps there is now a case to consider raising some extra enquiries when it can be seen from the Land Registry Document that the property to be purchased is held by a registered  proprietor who is not in occupation and or which is occupied by a tenant.

Questions of this type which conveyancers may wish to  consider include:

1 Please produce from the letting agent references for the tenant and confirmation on how the rent has been paid i.e whether in cash or by cheque as well as confirmation that all standard money laundering and identity checks have been carried out on the tenant.

2 Please confirm the date on which the tenant took up occupation.

3 Please confirm that the funds to be transferred on completion are to be paid into a bank account held in the UK.  If the funds are to be paid into an account abroad please confirm that these will be held by you for 48 hours before the funds are remitted ( the reasoning here is that if the buyer turns up on completion to find the property occupied without vacant possession ) there may be some time available to prevent the funds from being remitted.  In the present case this would not have helped as the property was vacant at the time of completion.  If the buyer’s conveyancer  had known that the tenancy agreement was only granted prior to the marketing of the property and was now being sold with vacant possession then this may have rung some alarm bells. 

I am not sure whether these questions will find favour with the sellers solicitors but at the very least they may put the sellers solicitors on notice that the transaction is a high risk one and as a consequence raise the level of vigilance.

At the end of the day detection of fraud to a large extent is based on instinct and more often luck.   All practitioners can do is to ensure all the standard checks are carried out and that staff are trained on what to look out for and to remain vigilant throughout the transaction. 

MJP Conveyancing are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877067 or via email at


Popular posts from this blog

Party Wall Act Costs - Protecting the building owner from the Highwayman

One of the most worrying aspects of entering the Party Wall Act 1996 (Act) arena is the uncertainty surroundingfees, or as they are referred to within the Act -‘costs’.
If you are fortunate enough ( or some might say lucky enough) to have at your side a competent party wall surveyor, and one with a moral compass, the chances are you will derive a certain degree of protection.However, there is still no guarantee you will not need to set aside a considerable sum of money to cover the cost of becoming trapped within the Act.This applies equally to both building owner and adjoining owner, and one must not forget that if an adjoining owner’s surveyor does not recover all of his costs from the building owner, there is every possibility the adjoining owner may be left to meet the remaining liability.
The problem of high, unreasonable and unpredictable costs is caused, in part, by a piece of malfunctioning legislation, and patly as a result of certain unconscionable conduct on the p…

Building Regulations and moving home

Do I have supply evidence of Building Regulation Approval in respect of works carried out to my property when I look to sell my property?
If you have the approval then of course supply it – it will help to ensure your sale moves quickly.
If you have carried out works and approval was required and sought and you no longer have a certificate then call the issuing council and ask for a duplicate.
If you have carried out work, and the work required building regulation approval, but this was not sought then you need to consider with your solicitor when the work was carried out and what to do in response to your buyer’s request for sight of the approval.
The following may help.
Check that work carried out actually required building regulation approval as not all work attracts the requirement.
If the building work was carried out before November 1985 it would not require building regulation approval. There is no need therefore to supply it or offer indemnity insurance.
If work was carried out af…

Do not purchase a New Build Property without first reading this....

Buying a property which has yet to be built, or which is newly constructed should be approached with care and here are some tips which will help:
Remember those friendly and helpful people within the sales offices are sales people and are no different from those people who you would find in car and double-glazing showrooms.  They are paid on results and work under the pressure of targets.   Once they have you signed up they will be your best friend and be in regular, sometimes daily, contact until they have collected all of you money.   There are many instances when this shadowing could be conceived as harassment.At the outset you will be asked about whether you have a mortgage and a solicitor to undertake the legal work.   You will be steered towards making use of the developers preferred brokers and solicitors.  These are ‘partners’ who have been chosen to work with the developer as the developer expects those partners to report to them regularly and to do all they can to ensure the …