Can your house be stolen?
Published on 06 October 2012
The quick answer is yes, and recent changes in the law make it even easier. Here is a true horror story of how a teacher in Hove had his house stolen.
In 1998 Mr Hawthorn decided to take a sabbatical from his job as a science teacher in Sussex. He rented out his home in Hove and went as a volunteer to Laos. In 2000 he decided he would stay on in Laos permanently.
His house in Hove was mortgage free and the rent helped pay for his living expenses in Laos. All went well until in 2005 his letting agents sent a message to him saying his house in Hove had been repossessed by GMAC which had security on the house.
In April 2005 the agents had found a new tenant called Mr Manning. He passed the referencing checks and paid six months’ rent in advance as well as a deposit. He never spent a night in the house. He collected utility bills addressed to Mr Hawthorn, the owner. One week after the start of the tenancy Mr Manning went to a mortgage broker and claimed to be Mr Hawthorn. When asked to produce evidence of identity he produced a driving licence bearing the name of Mr Hawthorn. Mr Manning was advised to apply to the Cheltenham and Gloucester Building Society. On his application form he gave details of a generous income and his employers details. The employer did not exist but Mr Manning had arranged for an answering service to answer with the name of the company and confirm the connection with the bogus Mr Hawthorn. The Cheltenham and Gloucester then wrote to the employer (actually a mail box service in London) and were not satisfied with the reply received. Mr Manning’s application was turned down.
Mr Manning went back to the broker and this time an application to GMAC was successful. Mr Manning had mortgaged Mr Hawthorn’s house for £207,495. Mr Manning had succeeded in using the same driving licence and utility bill to open a bank account in the name of Mr Hawthorn at a Lloyds TSB branch. He paid in the cheque for £207,495 and then withdrew it as cash, and disappeared.
By October that year no repayments had been made to GMAC and it exercised its rights to repossess the property. And it changed the locks. Mr Hawthorn’s brother was the first to find something wrong when new tenants complained that the keys they had been given did not work.
Then we come to the twist in the tale. On application to the Land Registry Mr Hawthorn’s representatives were told that the law only permits a change in the Title recorded by the Land Registry if an entry has been made “by mistake”. Of course there had been no mistake. The charge in favour of GMAC was quite deliberate. It was therefore not possible to remove the charge, and with a charge the repossession was quite lawful in the absence of repayments. And this is where you feel that there is some good in the world; GMAC (which takes pride in its anti-fraud measures) withdrew the repossession notice and accepted the loss. The property was returned to Mr Hawthorn.
Could this happen to you? Well yes it could. It could happen in one of two ways. Either by identity theft as happened to Mr Hawthorn in the true story above, or simply by someone filling in a form, sending it to the Land Registry and the true owner not opposing it because they didn’t know about it.
In 2009-10 the Land Registry paid £4.9million for 53 claims arising from fraud and forgery. This is ten times as much as the £491,656 paid on 15 claims in 2004-05. And with a change in the law this type of fraud has become much easier. Take a look at form AP1 issued by the Land Registry.
HM Land Registry recognises the risks described in this article and makes available at very low cost tools to help you protect yourself from property theft. Do please look at the protect your home from property fraud page on the Land Registry site.