Real estate property is one of the most valuable tangible assets – including gold, securities like stocks, bonds, cash, vehicles, etc. a person can own.
Hence, like everywhere else around the globe, real estate and property fraud are one of the most common occurrences of fraud in the UK as well, even though it may not be widely reported. Since this issue is on the rise, this blog by ANWA Properties takes a deeper look into the matter and discusses how to avoid fraud in real estate.
Types of Property Frauds
Before jumping into ways to avoid property scams, it is important to identify and understand the types of property frauds that exist, which can be avoided in the future.
The most common properties that are at risk of fraud include rentals, vacant or properties listed as ‘holiday homes’, if a property is mortgage-free, has a high -value or the owner lives abroad.
Identity theft and impersonation
Where a person steals an identity or uses a false identity to pretend to be a buyer, seller, conveyancer or at times acts as a fraudulent company to commit title fraud.
While acting as a buyer, the person usually targets sellers in a hurry to sell their property. The criminal usually drops the sale amount at the last minute, deceiving the seller to sell their property at a much lower rate than that in the market.
The person commits fraud by taking up a false identity of the owner and selling property. In such cases, a property with only a single contact number – of the property is listed.
In such cases, the person acts as the middle-man which places him or her in a position to have funds transferred to his or her account and run off with it.
Through this practice, the person performs fraud by stealing mortgage money from a private lender or a financial company.
Fraudulent Real Estate Listings
The fraudulent real estate practices are also dominated by disputed or forged properties marketed as real estate listings which later negatively impact illegal real estate transactions.
Identified as one of the lucrative investment opportunity, the real estate sector has witnessed a rise in real estate projects, both commercial and residential, to attract investments by investors, both nationals and overseas.
However, this has resulted in scammers setting up false real estate projects or acting as an ‘Investment Agent’ of a specific company. As a consequence, people end up losing their hard-earned life savings by investing in fake projects or with such agents.
Ways to Avoid Fraud in Real Estate
Register Property with Land Registry
It is imperative to registry any and every property you own with the Land Registry, and other relevant offices.
This provides a security blanket in terms of notifying the owner in case anyone tries to transfer the land deed to someone else’s. In case of a scam, the owner will be compensated as per the rules of the law.
Before entering any kind of deed, it is imperative to thoroughly research the party you’re entering the deal with. No matter what an agent or third-party involved may say, a buyer or seller must conduct research of their own – which includes
Checking the status of the property from all relevant offices
While buying a property
In the case of buying a property, one must get in touch with the party prior to one’s entering the deed. In case of any discrepancy, make sure to check in with the authorities.
While renting a property
Be careful of landlords or real agents who act over-enthusiastically, pressuring you to pay the rental amount or security deposit before signing a deed.
In case of renting out a property, make sure to add a clause that allows surprise visits by the landlords.
While selling a property
Before selling a property, make sure to research the market value or opt for professional valuation services, to get the maximum offer for your asset. Negotiate the price only after you’re sure of the real value of your property.
In case of selling a property, one must register and report the other party with all the relevant offices, including the Land Registry.
While Investing in a project
Before investing in any project, make sure that the property is approved by the respective development authorities. In case of investing in a project through an agent, make sure to visit the office where they work. Invest only after you’re entirely sure.
Request a Restriction
By requesting a restriction on your property, a solicitor or conveyancer is bound to verify a transfer of a deed or mortgage of the property.
Every real estate transaction – be it buying, selling, renting or investing requires due diligence. Hence, it’s better safe to be sorry while entering into any type of property deal.