Red flag alerts – signs that the seller may be dodgy and NOT the owner

| Rosalind Renshaw

Yesterday on EYE, Rob Hailstone of Bold Legal Group posted that he had drawn up a list of ‘red flags’ for solicitors and agents to be aware of.

This was in the context of our report on two cases of identity fraud where two different buyers had been duped out of their money by fake vendors.

Both deals had gone through the normal channels – ie, estate agents and solicitors – and ended up as cases at the Court of Appeal. In one case, the agent was being sued by the buyer, albeit unsuccessfully.

Hailstone tells us that a number of readers requested the ‘red flag’ list. However, if you were one of those, you may not have seen the final tweaked list which was issued last night. One of the additions to the list was suggested by an EYE reader, resulting in a new warning over properties being put up for sale at inexplicably low value.

Here is the list of potentially dodgy sellers, compiled by Bold in conjunction with its members and also the Society of Licensed Conveyancers:

RED FLAG – RISK GROUPING

  1. BUSINESS SOURCE
    1. Unusual introducer
    2. Direct approach where reason for contact questionable
    3. Proximity of the party to their conveyancer – if there is a distance, why?
  2. SELLER CHARACTERISTICS
    1. Absent owner or landlord
    2. Owner/seller living abroad
    3. Recently issued (new) ID documents/driving licence etc
    4. Seller’s lack of knowledge about the property
    5. Where the seller lives at a different address from the property and has no documentary evidence such as bills or buildings insurance schedule linking seller to the property
    6. Proximity of a signatory to the witness – if there is a distance, why? What is the relationship between the signatory and the witness?
    7. Email contact (remote client)
    8. Sole proprietor
    9. Long-time owners (high equity)
  3. PROPERTY CHARACTERISTICS
    1. Empty
    2. Tenanted
    3. Unencumbered (no mortgage)
    4. High value
    5. Unregistered
    6. Where there is no restriction on the register to comply with
    7. Low value without a good/plausible and verified reason
  4. OTHER CHARACTERISTICS
    1. Quick sale required
    2. Quick, back to back sale (increased price)
    3. Funds going abroad or to an unusual destination
    4. End of chain transaction

The above list is not meant to be 100% exhaustive but merely a guidance as to what issues or circumstances, taken alone or together, could point towards a fraudulent transaction taking place.

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5 Comments

  1. Rob Hailstone
    May 17, 2018 at 07:04

    If anyone has anything to add, or suggest, please post here or let me know: rh@boldgroup.co.uk

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  2. Woodentop
    May 17, 2018 at 09:23

    Quick flipping. Also I appreciate this article is about sellers duping buyers, but how about the buyers duping the sellers? … from abroad, not inspecting the property, buying beyond means for example with Money Laundering.

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  3. whitby64
    May 17, 2018 at 10:30

    Very useful and I shared with our lawyer who agreed with all but begs to differ with 3.5 and says “One of the warning signs listed is the land being unregistered, but unregistered land is the safest because there are real title deeds. This type of fraud arises largely because tangible title deeds have been abolished and the Land Register is open access.”

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  4. Rob Hailstone
    May 17, 2018 at 10:49

    I agree on the whole with your lawyer whitby64. However, some unregistered property owners keep their deeds at home, probably not very safely! Also, a vulnerable elderly person could easily be persuaded to part with their deeds to a smooth talking con man/woman/relative.

    The LR have also stopped transactions because they have noticed a discrepancy at their end which they would not notice on a first registration.

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    1. whitby64
      May 17, 2018 at 10:57

      Point taken. As the only example of a fraudulent sale I have ever experienced was over 30 years ago (long before the internet/mobile phones/money laundering etc) when an owner went to work on a Middle East oil field for 2 years (so pretty much uncontactable) and let his home to a friend of a friend – sadly leaving his title deeds of his mortgage-free property in a box in the loft ……….. you can guess what happened ……… Fortunately the “seller” was not that bright as agreed to a “sold” board – spotted by the true owner’s sister

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