There have been no small number of articles about fraudulent property issues, with home buyers losing their deposits to scammers
, or in some cases, even buying properties from people posing as the owners, as in the Dreamvar v Mischcon de Reya case
earlier this year.
The Law Commission claims that HM Land Registry has had to pay almost £60 million in indemnity payments in the last ten years due to fraud. They are suggesting significant changes to land registration law to ensure the register is accurate and confirm identities of buyers and sellers.
The H M Land Registry has already made some changes in the last couple of years to try and expediate the process - in April 2018 the first digitally signed mortgage
was filed into the register, and the ‘Sign your Mortgage Deed; and ‘Find Property Information’
services are digital improvements.
The Registry said this was part of a 5 year strategy
to simplify the home buying process online by digitising their data. They felt this would speed up home buying, especially when it came to conveyancers submitting applications, or the need to send requisitions (when further information is needed) back to solicitors.
The Law Commission’s suggestions are more focused on how digitising the industry can open up gaps for fraudsters to take advantage, and how to limit these issues.
Many of the proposals are focused on identity verification and seem to place the onus on the conveyancer - setting up steps that insure identity checks are done by solicitors, imposing a duty of care on the conveyancer and the opportunity to make the conveyancer liable when the appropriate checks aren’t made.
Other suggestions include bringing mines and minerals onto the register, allowing electronic conveyancing that doesn’t require completion and registration to happen simultaneously, and helping to determine land boundaries to limit ongoing litigation.
However, some in the industry are asking whether attempts to make the process more efficient go hand in hand with minimising fraudulent activity – aren’t more checks and balances likely to slow down the process? As the H M Land Registry are already in the middle of a 5 year digitalisation, is it a good idea to impose further expectations?
Or is the Law Commission suggesting that issues with fraud should be taken more seriously, and the home buyer protected more thoroughly? With these suggestions, the responsibility for paying out liability payments would fall with the conveyancer, not the H M Land Registry.
Rob Hailstone, of Bold Legal Group
"At first glance I cannot see these measures making conveyancing quicker. More rules, red tape and bureaucracy being imposed on the conveyancer is the last thing we need right now. Conveyancers already jump through more hoops than the show dogs at Crufts. Needs careful consideration and implementation. Having said this, if it is made clear to all firms exactly ‘what steps have to be complied with’ that could be a good thing."
Similarly, Jeremy Raj of Irwin Mitchell cautioned that adding another set of standards for conveyancers is likely to “increase administration and delays in the conveyancing process
It’s clear that with improvements in technology and the digitising of the home buying process, it should be quicker and simpler to buy a home. However, checks and balances do need to be in place as fraudsters become smarter and savvier in tricking people out of thousands of pounds. Whether or not the responsibility is with the conveyancer, as the Law Commission seems to be suggesting, is an ongoing case.
If you are concerned about spotting fraudulent emails and ensuring the safety of your transaction, have a look at our Friday Afternoon Fraud safety tips.