Letting agents: mother & daughter £266k fraud

Mother of disgraced letting agent pleads guilty to her part in £266,000 fraud https://t.co/qSv8euf2N9 via @https://twitter.com/TheNeg

— The Negotiator (@TheNeg) April 9, 2019

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Solicitor jailed for helping build £10.8m property empire

Solicitor jailed for helping build £10.8m property empirehttps://t.co/oqVO7lTfMp

— FTAdviser (@FTAdviser) January 7, 2019

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Landlord's 5-year council tax fraud

Landlord's five-year council tax fraud https://t.co/x3XGsd2QsA

— Property Hawk (@landlordnews) June 5, 2018

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Lenders crackdown on secret BTL's

Lenders in crackdown on 'secret' buy-to-lets https://t.co/Cj467xIiTO

— Courtenay (@CourtenayEA) June 16, 2017

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Email scam targets Mydeposits customers

Beware of an email scam targeting mydeposits Custodial landlord and agent members. Read our blog for details - https://t.co/5Z6uozWGHo pic.twitter.com/po18ydtDey

— mydeposits (@mydeposits) March 20, 2017

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Avoid fraud -register with Land Registry

Our free Property Alert can help detect fraudulent activity on your property https://t.co/NiFh1kpxsh. Join the 50,000 who have signed up. pic.twitter.com/nKHHslndHJ

— Land Registry (@LandRegGov) December 8, 2016

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Fake landlords cheating tenants

The crooked landlords who are finding new ways to cheat desperate renters https://t.co/fWk6VHkZG3

— Guardian news (@guardiannews) October 24, 2016

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Inside track - class action

According to reports on thisismoney a class action is being prepared by residential investors who were allegedly swindled out of hundreds of thousand of pounds by property sourcing company Inside Track during the boom years.

I can't believe that many investors effected made their first investments as early as 2002.  That's almost a decade ago.  Time really does fly but some wounds still have not healed!


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Buy-to-let fraud

I know I've commented in length about some of the issues that affected landlords at the peak of the buy-to-let boom. including buy-to-let fraud.

However, even I was a little shocked following a meeting with an old business friend who at one stage had an interest in estate agency.

He'd heard about several occasions where surveyors were asked by developers to provide valuations on new build apartments.  The developer would then present the surveyor with an envelope stuffed with thousands of pounds and a figure written on a piece of paper slipped into the same envelope. The obvious implication being that if they compromised their professional judgement and 'valued up' he would be several thousand pounds better off.  If the surveyor refused; the developers would then just move on to another agent until they found one who was prepared to accept the bribe.
 
These over valuations were vital for many developers to be able to sell apartments at inflated values to unsuspecting investors.  Many of these property investors are now left with significant negative equity and are being kept afloat by historically low interest rates.

This is the first time I've heard first hand evidence of these sharp practices and I'd be interested to hear of any other examples.

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Scullion case to open floodgates?

I was listening to Radio 4 discussing the recent Scullion case where a landlord successfully sued a surveyor for their over valuation of the rent and the loss they suffered on their buy-to-let investment.  It was pretty dramatic over valuation where the surveyor put a rental value of £2k a month on a property that eventually only let for half that.

The pertinent point of the case seemed to be previously there was always a duty of care on the mortgage companies valuer in respect of a house buyer who would use the property valuation in making a decision on their purchase.  However, because of the fact that a landlord and a buy-to-let was considered a commercial transaction the same duty did not apply.  The consensus opinion of the lawyers interviewed on Radio 4 was that the Scullion case extended this duty of care to buy-to-let landlords.

This leads me to think that the Scullion case could open the flood gates to a whole range of actions by buy-to-let investors who relied on RICS surveyors in making their investment decision.  A word of caution though.  As a former surveyor; there is a considerable margin of error in valuations, typically 10-15%.  Therefore unless the error was very significant then the landlord could find that the lawyers get rich and they end up with nothing more than a large legal bill.

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Landlords warned on LR fraud

Advice in the latest Young Groups newsletter highlights how landlords can avoid the dangers of Land Registry fraud where unscrupulous individuals attempt to sell or take ownership of a landlords buy-to-let property.

Steps that a landlord can take to avoid it are:

• Register your title. If you have not registered your property with
the Land Registry, do so straight away. Registering your property will
give you greater security of title. Also, if you do register and then
become the victim of fraud, you may be eligible for compensation
from the Land Registry.

• Keep your contact details up to date. When renting out a
property you should register a correspondence address which is
different to the property address - an ‘address for service’. The best
address for service would be your home address but make sure that
you update the Land Registry if you move house.

• Consider multiple ‘addresses for service’. To further
prevent fraud, the Land Registry allows you to have up to three
addresses for service. So rather than just putting your own
home address down,consider also providing them with your
email address, you may fi nd it useful to add your solicitor as the
third. Some of our clients already list Young Group’s details too.

• Put a restriction on your title. If you think you are particularly
at risk of fraud, you might want to consider applying for the entry
of a restriction on your title. This means that the Land Registry will
then not register anything on the property (for example a sale or a
new mortgage) unless a solicitor or other professional has certifi ed
they have checked your identity.

By taking these very simple steps it can make it much harder for
fraudsters to tamper with the title of your buy-to-let property.

See this article about more info about how land registry fraud can affect landlords.

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Police chief jailed for BTL fraud

The Telegraph reported yesterday that a 46 year old police chief, Charles Overend a specialist detective constable with 23 years of exemplary service for the Met; was jailed for nearly 6 years for committing a huge buy-to-let fraud.

Overend obtained millions of pounds through deception in order to acquire a 33 property portfolio worth millions.

Now Overend, with his background should have a known better. A policeman has a duty not only to uphold the law but to set an example. He clearly failed and rightly has paid the price.

Conspiracy of interests

However, my point would be that he is not alone in his guilt.

At the time, the media noise buoyed by programs such as Sarah Beenies "property ladder" was deafening. We were all pummeled by stories of millionaire property magnets that started with nothing , bought property, most importantly weren't scared of borrowing, and made a mint.

Debt was good, debt was cheap. Lenders were falling over themselves to lend. Surveyors were desperate to value property at whatever value you wanted as long as their masters allowed, the banks wanted to lend more.

It was only the lazy or the inept that sat around & did nothing whilst others got on and made a future for themselves. Even 'good socialists' like Tony Blair & his cronies were doing it.

If the music hadn't come to such an abrupt end the likes of Overend may have got away with it.

I suspect the unfair thing is that there are lot more like him, who because mortgage companies do not want the hassle of dealing with their own ineptitude will get away with it. Properties will be repossessed. Balance sheets rebuilt & we all will move on.

My point is that Overend is a criminal no doubt; but he also is a victim of a wider conspiracy and an age old vice. Greed.

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RICS surveyor over valuations

A surveying company used by the major BTL mortgage lenders has been accused of massive over valuations on investment properties in Sheffield.

The RICS-approved surveyors, Lexicon Surveying Services are now in administration.

They have been accused by property investors of massive over valuations on both property values and rental values.

The most extreme case was on a property they valued at £325,000 in December 2007, that was later revalued by independent surveyor Hale Saunders as having been worth just £165,000 at the time of purchase.

Property investors have been left in severe financial distress.

This continues to support our over worn mantra.......research, research, research!

Read the full article on this here

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BTL investors face getting chased by developers following court case ruling.

A High Court test case in Bristol has been won by Prestige Homes South West, which won damages from a BTL property investor who pulled out of the purchase of two apartments at the Zero 4 development in Plymouth.

This test case could lead to many more investors facing bankruptcy as developers chase those who walked away from deals when they realised the properties had dropped in value by more than the deposit value they had placed with the contract with the developer.

With the test case awarding £133,282 to the developer it could lead to developers chasing a lot more investors who walked away from the contracted deals.

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Landlords and ID fraud

We have reported in the past of the importance of referencing tenants properly to ensure that you are getting the tenants you thought you were - not the tenants from hell.

Therefore a recent reminder that this week is National ID fraud week comes at an opportune time to remind landlords that before they take on tenants they need to carry out certain checks.

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Landlords should always ensure that they get as much information from their tenants as possible before signing the tenancy. We recommend a minimum of 3 months bank statements, utility bills and some form of photo id such as a new style driving licence or passport so that any name can be checked against an actual physical representation of the prospective tenant.

Landlords should realise that no system is full proof, but putting in basic guards is likely to result in 'scammers' running for cover and moving on to a less well prepared landlord.

For more information on ID fraud go to the website

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Landlords who use owner occupied mortgages committing fraud

Landlords that are tempted to take out an owner-occupier mortage as a way of securing more benificial terms to purchase a buy-to-let property are committing fraud according to the industry organisation The Council of Mortgage Lenders.

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Landlords tenants disadvantaged.
It could also put the landlord's tenants at a disadvantage should the landlord stop paying the mortgage.

This is because specialist buy-to-let mortgage products have a mechanism in place to accept tenants' rent in place of mortgage payments which negates the need for court action and the possibility of repossession.

An owner-occupier mortgage on a rented property can lead to problems for the tenant if the landlord fails to keep up repayments and also increases the risk for the lender, with the CML describing such behaviour as "irresponsible".

"Everyone sympathises with those tenants who are paying their rent, and fulfilling their obligations, but who find that their landlord has not been paying their mortgage and not told their lender that they are renting out the property," said director general Michael Coogan.

"Good tenants should not be disadvantaged, and nor should lenders, by the irresponsible behaviour of a small minority of landlords. We look forward to working with the government and advice agencies on effective measures to help the modest number of tenants affected."

CIFAS warning
The other risk to landlords of trying to obtain a owner occupation mortgage is an impairment of their credit rating should they be found out. This is activated by a lender who identifies a borrower trying to access funds fraudently potentially including the borrowers details on the CIFAS register. This warning will remain on a landlords credit file and be shared between other CIFAS members. Lenders can take this warning into account when looking to advance funds to the landlord in future.

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Buy-to-let fraud

It's official. Many buy-to-let landlords were duped by so called professionals such as surveyors, solicitors who were all signing off speculative residential developments often in City centres knowing that buy-to-let property was over valued whilst happily taking their fees. Landlords were misled by developers and their surveyors that they were receiving a discount when in fact they were over paying for property even with the so called generous 25-50% discounts.

Property Hawk highlighted this potential buy-to-let fraud way back in August 2006.

The Times has recently highlighted an investigation by the serious fraud office into this practice of buy-to-let fraud

The Serious Fraud Office (SFO) are investigating several schemes that have obtained millions of pounds in funds from banks.

The SFO said last week it was investigating two alleged buy-to-let frauds, involving properties in Leeds, Cardiff, Nottingham, Derby, Liverpool, Hull, Newcastle upon Tyne, Glasgow and London. Police in Greater Manchester, the West Midlands, and West Yorkshire are also involved in the inquiries.

At the centre of one of the biggest police investigations is Morris Properties, which specialised in student new-build flats and refurbished homes in Leeds and the northeast. It sold 1,000 properties before going bust last summer.

The firm was established by Simon Morris, a local developer who built up a £69m fortune by selling buy-to-let properties.

Morris’s firm lured investors with promises of substantial “discounts” on flats that were allegedly overpriced, and guaranteed rental income, which in many cases failed to materialise. Investors, drawn in by the mirage of ever-increasing house prices, were easy prey.

Have you fallen victim to buy-to-let fraud? If so post your experiences and thoughts here and help other landlords get justice.