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Recent case law has found that a fraudster was able to trick solicitors and estate agents into selling a property which he pretended to own. The real owner of the property was none the wiser, until completion had already taken place!
This case law has highlighted key issues about the liabilities faced by solicitors and estate agents, when checking ID. The two key cases are the conjoined appeals P&P Property Limited v Owen White & Catlin LLP and Dreamvar (UK) Limited v Mishcon de Reya  EWCA Civ. 1082.
The fraudster in question had purported to be the owner of a vacant property in Hammersmith London. He convinced the defendant firm of his identity by using intercepted utility bills and a false passport. Once the sale proceeds of just over £1 million pounds entered his Dubai bank account, the fraudster disappeared. The true owner of the property only found out when he visited and found the “new owner” renovating.
The Court of Appeal accepts that a seller’s solicitor, acting for a fraudster, may incur a liability for breach of implied authority and that will most probably be held to have acted in breach of trust/undertaking.
At the same time, the buyer’s solicitor may also have to contribute to any remedy as the Court of Appeal also considers that they will have acted in breach of trust.
There are a few things that home-owners can do to protect themselves against fraud. Two ways to do this are:
Lastly, there are now certain restrictions to protect a home-owner’s property from fraud. For individuals who do not live at the property, adding a ‘Form LL’ restriction is now considered best practice. This restriction provides an extra measure of protection for the home-owner, as the solicitor dealing with the transaction has to provide a certificate of satisfaction that the person who signed a Transfer is the same person as the person named on the register.
If you would like to discuss ways in which to protect your property from fraud, please call 0161 941 4000 and ask to speak with a member of our specialist Residential Property team.