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Property and registration fraud

11 October 2010

What is the issue?

  • Fraud is on the increase and there is a rising incidence or awareness of fraudsters targeting the properties of both individuals and companies. These attacks often include identity and other types of fraud and the presentation of forged documents to Land Registry for registration. Land Registry wishes to bring these matters to the attention of the public and have issued public guides to this effect.
  • This practice note aims to assist you when acting in property transactions. It may also help you make your clients more aware of how they may protect their property interests against fraud and safeguard their rights as legitimate property owners on the register.
  • This advice is not exhaustive. Many aspects of mortgage fraud can also be adapted to commit registration fraud. For further information see the Law Society practice note on mortgage fraud.

Legal status

This practice note is the Law Society's view of good practice in this area. It is not legal advice.

Practice notes are issued by the Law Society for the use and benefit of its members. They represent the Law Society's view of good practice in a particular area. They are not intended to be the only standard of good practice that solicitors can follow. You are not required to follow them, but doing so will make it easier to account to oversight bodies for your actions.

Practice notes are not legal advice, nor do they necessarily provide a defence to complaints of misconduct or of inadequate professional service. While care has been taken to ensure that they are accurate, up to date and useful, the Law Society will not accept any legal liability in relation to them.

For queries or comments on this practice note contact the Law Society's Practice Advice Service.

Professional conduct

The following sections of the Solicitors' Code of Conduct 2007 are relevant to this issue:

  • Rule 1.01 Justice and the Rule of Law
  • Rule 2 Client relations
  • Rule 3 Conflict of interest
  • Rule 3 Acting for lender and borrower in conveyancing transactions
  • Rule 4.01 Duty of confidentiality
  • Rule 4.02 Duty of disclosure

SRA Principles

There are ten mandatory principles which apply to all those the SRA regulates and to all aspects of practice. The principles can be found in the SRA Handbook.

The principles apply to solicitors or managers of authorised bodies who are practising from an office outside the UK. They also apply if you are a lawyer-controlled body practising from an office outside the UK.

Terminology

The register - The register of title, except in the context of cautions against first registration ( s.132 LRA 2002)

Conveyancer - A solicitor, a licensed conveyancer within the meaning of s.11(2), Administration of Justice Act 1985, a Fellow of the Institute of Legal Executives (r217(c), LRR 2003), a barrister (r217(d), LRR 2003), a duly certificated notary public (r217(e), LRR 2003), or a registered European lawyer (r217(e), LRR 2003)

Legitimate owner - The rightful claimant to the land or the interest in land whose rights require protection, which could include someone with the right to apply for first registration ; a registered proprietor; a registered proprietor of a charge; or someone with the benefit of an interest such as a notice or restriction See LRA 2002 for definitions

Property - Any land or interest capable of registration under LRA 2002

Criminal property - Property that:

(a) constitutes a person's benefit from criminal conduct or it represents such a benefit (in whole or part and whether directly or indirectly), and

(b) the alleged offender knows or suspects that it constitutes or represents such a benefit (Section 340(3) of the Proceeds of Crime Act 2002)

Organised crime - Two or more people involved in continuing significant illegal activities; such a group is capable of defending its members with violence, coercion or corruption; and more than £1m in criminal proceeds has been generated

Law enforcement agencies -

(a) the Commissioners or any other government department

(b) the Scottish Administration

(c) any other person who is charged with the duty of investigating offences or charging offenders, or

d) any other person who is engaged outside the United Kingdom in the carrying on of activities similar to any carried on by the NCA or a police force

( Section 3(4) (a) of the Serious Organised Crime and Police Act 2005)

Must - A specific requirement in the Solicitor's Code of Conduct or legislation. You must comply, unless there specific exemptions or defences provided for in the code of conduct or relevant legislation

Should - Good practice for most situations in the Law Society's view. If you do not follow this, you must be able to justify to oversight bodies why this is appropriate, either for your practice, or in the particular retainer

May - A non-exhaustive list of options for meeting your obligations. Which option you choose is determined by the risk profile of the individual practice, client or retainer. You must be able to justify why this was an appropriate option to oversight bodies

The Law Society also provides a full glossary of other terms used throughout this practice note

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