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Landlords beware fraudsters mortgaging your property

Locked houseI have been alerted by the PainSmith blog to a worrying case about property owners not being able to set aside a mortgage taken out by fraudsters:

Barclays Bank Plc v. Guy [2008]

Reported here.  In this case Mr Guy’s property was wrongly transferred into the fraudsters name at the Land Registry and a mortgage was taken out.

The Court held that Mr Guy could have the property transferred back into his name at the Land Registry.

However it then said that he could not reverse the mortgage, because it had been granted in good faith by the bank on the basis of the Land Registry entires.

It is a general rule that people are entitled to rely on information held at the Land Registry as being correct.

So unless Mr Guy paid the money back to Barclays they would be entitled to claim it from him.

Don’t let this happen to you.

It is very easy to protect yourself against this sort of thing happening.

Your contact details

The most important thing is to make sure your contact details are up to date, particularly if you are not living at the property (for example if it is rented out to tenants).

Register a restriction

The other thing you can do is to register a restriction. This means that the Land Registry will not register a dealing with your property, for example a transfer or a mortgage, unless a solicitor or other professional conveyancer certifies that they have checked the identity of the person who has signed the deed.

This is all explained on the helpful Land Registry Property Fraud page.

You will also find further guidance on my this earlier post on protecting against fraudsters and criminals

(See also the comments area below and >> click here to read our terms of use and comments policy)

Important note. If you are reading an old post, remember that the law may have changed since it was written.

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5 Responses to Landlords beware fraudsters mortgaging your property

  1. Looking at the judgement it relates to a size and type of transaction that is a bit different to a typical residential property!

    Tessa, I think if a fraudster took out a mortgage, or sold, a property belonging to someone else, without the owner being aware, or even knowing of the existence of the fraudster, they couldn’t be legally liable?

  2. I wouldn’t count on it. There are easy remedies for the property owner to take – make sure that their contact details are correct and take out a restriction.

    If property owners can’t be bothered to do that, then I’m not sure they should expect the law to protect them if someone buys from a fraudster in good faith.

  3. I updated all mine a few years ago and land registry were absolutely brilliant.

    I contemplated placing a restriction on them as it is free to do (in my circumstances) but conveyancing solicitors in general are absolutely bloody useless. Even if you’ve found a good one, the chances of both being competent is pretty slim. To add another layer to the system and create another opportunity for them to levy an additional fee outweighs the benefits for me.

    If someone is bright enough to carry out this scam, they are probably bright enough to find a bent solicitor, if they aren’t already one in the first place.

    Having up to date contact details and a mortgage on the property is sufficient for me
    – unless someone can convince me otherwise?



About the post author:

Tessa Shepperson

Tessa is a lawyer and specialises in creating products and services which help landlords and letting agents learn and understand landlord & tenant law. For example, she runs the Landlord Law website (now in its 14th year) and is a director of Easy Law Training Ltd and Your Law Store. Tessa also sits on the Property Redress Scheme Council. When not working she enjoys reading, cooking and messing around on the computer. You can also find her on Google

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Tessa is an English lawyer specialising in residential landlord and tenant law.

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