Donna and her best friend Amanda bought a buy-to-let property from a trusted source in October 2010. It was a great deal, with no work required to the property, and it even came with an existing tenant. Problems first started in December 2010 when the rent wasn’t paid and after going through the correct procedures to access and check the property, to their shock and horror they found that the house had been systematically vandalised:

• Carpets gone
• Bathroom gone
• Kitchen gone
• Gas fires gone
• Radiators gone
• Boiler stripped
• Plug sockets gone
• Light switches gone
• Electricial wires cut so high up in sockets and light switches that it now requires a full re-wire
• Floor boards lifted
• Some internal doors gone
• Ceilings damaged
• Inside of house painted black

Here’s some pictures of the damage (not for the faint hearted) – I think you will see which ones are the after photos.

Donna described the wrecked house as looking like “hell on earth”. Luckily, Donna and Amanda had taken out a comprehensive Landlord’s Insurance policy for the property which covered malicious damage. A claim was initiated and quotes gathered for the works to be done, totaling £30,000!

At this time Donna and Amanda were totally unaware of the second, even BIGGER shock that was about to hit them…

In the New Year they were notified of a police investigation surrounding the house, not because of the malicious damage – as they initially thought - but because a man claiming to be the “real” owner of the property had contacted the police to say that his house had been sold without his knowledge or permission! So if this man was telling the truth, then Donna and Amanda had not only purchased a stolen house, but even worse – they were now implicated in a fraud case meaning that they swiftly went from being victims of vandalism to defendants of fraud!

The severity of this second shock soon hit home as they began to ask themselves:

• How can we have bought a stolen house?
• We did everything correctly. We used a reputable firm of solicitors so how could they have allowed this to happen?
• The solicitors that represented the seller were also a respected local firm, so how could they have got it wrong?
• If the house is proven to be stolen, what happens to the mortgage we have taken out – who is going to repay it?
• Whilst the case is investigated do we have to keep paying the mortgage?
• Should and can we repair the damage to the house whilst the investigation continues so that at least we can re-let it to cover our monthly costs?
• Will our insurers pay out if the house is suspected as being stolen?

The alleged real owner of the property has now applied to the Land Registry to get the title back on the property. Donna and Amanda have therefore had no choice but to legally challenge this because they bought the property in good faith and had taken out a mortgage to purchase the property.

Six months down the line, they are no further forward. They don’t know how or when their property nightmare is going to end. So far it has cost them over £5,000 in civil litigation fees, with the prospect of more legal costs looming in the future.

As Donna and Amanda feel the situation is totally out of their control, they have both taken action and are launching a nationwide campaign with two objectives:

1) To make the general public aware of this new and fast growing fraud

2) To suggest a solution to make the conveyancing process more robust

What the solicitors say:


MS LAW SOLICITORS have been selected to provide legal support to the campaign

This is what Mike Alexander of Alexander lawyers has to say about this subject

“One of our clients has recently had a fairly similar problem. Fortunately for that client the outcome was slightly different, and that particular client is left with a claim against the compensation fund run by the Solicitors Regulatory Authority. Whilst that particular client will recover their money, it is unlikely they will recover their costs in full or the interest they have had to pay out on money borrowed, but most importantly they will never recover the damage to their reputation.

This case has caused a number of discussions between my firm and the Solicitors Regulatory Authority, and it appears from those discussions that there is a high level of fraud in the property industry. We are now at a point where fraudsters are opening up branch offices as Solicitor’s Practices fraudulently, as well as people selling properties they do not own. It appears there are many different frauds taking place, and it is quite correct that little publicity is given to this.

The reason for this I believe is very simple. You only need to look at the new quality conveyancing system launched by the Law Society. This is being launched under pressure from the mortgage lenders in an effort to reduce fraud, and will bring more regulation into the conveyancing system at least for those Solicitors who join the scheme. What is interesting to note is admission to the scheme is dictated by a number of criteria. Right at the bottom is the experience of the Solicitor involved, and it follows from this that clearly mortgage lenders, Law Society and others have little regard for the experience of Solicitors in the property industry – they are more interested in creating systems and stream lined conveyancing processes that they believe the public wants.

It is this view point of Politicians, mortgage lenders, the Law Society and many others that has created a fertile garden for the fraud that is currently being undertaken. What we now have is a public register of property titles, that is open to anyone who has a computer. In short you can go on line to the Land Registry and draw down a significant amount of information about an individual property – who owns it etc, etc. This gives the fraudster everything they need, and a few other simple checks will identify properties that are occupied by tenants and a few enquiries will identify properties of this nature where the owners are living abroad for one reason or another. That is then, frankly, all the fraudster needs. He can then masquerade as the owner of the property, seek to sell it subject to the existing tenancy, with the full knowledge there are many potential purchasers out there who want to buy this type of product because they get a far better return than the money in the Bank in the current economic climate! He also has the knowledge that if he carries out his checks correctly then the first the owner will know about it will be in 6 months time or something like that when they come back to this country.

As we are dealing with fraudsters here it is not difficult to falsify passports and other proof of address details that are needed and requested by any reputable firm of Solicitors. At the end of the day however good or weak the Solicitor’s system is, the Solicitors are not trained and indeed are not responsible for fraudsters, and would not necessarily spot a fraudulent passport unless it was a really bad copy! It follows therefore that rightly or wrongly the view that has been taken in this country is that the public wants a stream lined fast conveyancing service. The ease in which information can be obtained electronically now is therefore a fertile feeding ground for fraud and this is a risk that cannot and will not be avoided in my view and is now here to stay unless in the very unlikely event that Politian’s decide to change the systems we are currently working with. It follows therefore that the solution to the problem must lie in insurance cover, and all buyers of property must become less cash conscious and stop looking for the cheapest deal. The public must be educated to understand that buying a property is the biggest purchase of their lives normally, and they should therefore do and spend what is necessary to protect that purchase, and that will include in the future purchasing insurance that will protect them against this type of situation”

This is what Richard Spencer of BPE has to say about this subject
Fortunately, I haven’t had first-hand experience of any fraudulent cases but, whilst shocked to hear Donna and Amanda’s story, I’m not that surprised. As anybody can access the Land Registry’s title register, it is hardly surprising that criminals are taking advantage. We can’t search the Passport Agency or DVLA’s register, so why can we search the register which records ownership of the most valuable assets we own?

To protect against fraud and money laundering, solicitors must obtain identification for all new clients and a good firm will not rely on photocopies. As Dean says, we’re not qualified to spot forged ID but we do offer electronic ID checks in addition to obtaining original ID. These checks will verify the client’s name against several registers including the passport agency, DVLA, electoral roll and others. If any of the original documents have been stolen or the supplied ID is fake, the online system should alert us. The system will only work if the documents are fake or the relevant agency is aware that an original document has been lost or stolen. In Donna and Amanda’s case, the owner of the document did not know his identity has been stolen, so the online ID checker would not have notified the solicitor.

One simple action all investors should take is to notify the Land Registry of three addresses for service, two of which can be email addresses. If anybody attempts to alter your title, you should receive an email from the Land Registry.

Another solution, albeit an unpopular one due to cost, is to take out a title insurance policy at the time of purchase. For a one-off premium of around £100, you can obtain cover of up to £250,000 against a number of risks including identity fraud. Investors should check if their existing insurance policy covers such risks before paying for an additional policy.

This is what Paul Ribbons Expert property Trader has to say on the matter
I was flabbergasted when I heard of Donna’s predicament, in 25 years I have never heard of anything like this. When hearing the news I spoke to my lawyer who confirmed this is a crime that is growing fast due to electronic procedures and its costing many buyers Thousands of pounds, thief’s are very sophisticated now a days. It makes it very hard for people to have faith in a system that is obviously flawed and needs to be updated to keep up with modern practices. We must pull together to try and prevent this happening in the future to others. I pledge my support to your cause Donna.

A growing problem
Since the Electronic Title Deed became available to download in 2003, this cost of this fraud has increased tenfold. In 2004-05 there were 15 cases reported by the Land Registry which resulted in them paying out £491,656 in compensation, in 2009-10 this increased to 53 claims resulting in the Land Registry having to pay out £4.9million.

How can you protect yourself?
Fraudsters tend to target properties that have no mortgages on them, so if you own a property that without a mortgage, Donna’s research on the internet suggests to protect yourself that you get a solicitor that you know and trust to enter a restriction on your title deed. By doing this, if someone does attempt to sell your house they will not be able to until the restriction is removed from your title deed, and you would have to give your permission for this to happen. So by doing this you can stop any potential fraudster in their tracks.

How can you help?
To raise awareness of this rapidly growing fraud and the trauma that it causes to innocent victims, Donna and Amanda have launched a website: www.stolenhomes.co.uk. Here you will be able to find out more information about this fraud, with articles from other people who it has happened to and their experiences. You can also listen to an audio recording of Andy, another property investor who was also a victim of this type of fraud.

Please tell all of your friends and contacts about the www.stolenhomes.co.uk website. On the website you will see that there is a petition, please do sign this petition and get as many people as you can to do the same. Donnas' MP Chris Kelly is fully supporting this campaign and is liaising with Lord McNally’s office at the MoJ, the Minister responsible for HM Land Registry and looking to take this to Parliament for them to put more stringent steps in place to protect buyers and sellers.

Donna says: “Something has to be done urgently to make the conveyancing process more robust and to stop fraudsters getting away with this crime, leaving innocent victims to carry the financial cost and emotional trauma of dealing with the consequences”.

Today the property remains uninhabitable as the insurance claim for the malicious damage is on hold because of the dispute over the title. Donna and Amanda still have to pay the mortgage and more funds have to be found for the on-going legal representation in the dispute, with no immediate sign of light at the end of the tunnel. Meanwhile the pair are focusing on publicising this little-known scam with the hope of preventing anyone else becoming a victim.

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