What does property fraud offer?
You might receive a brochure in the post offering you a course on how to become a property millionaire, or you may be invited to attend a free presentation on making money from property investment. Both might turn out to be a property fraud and you may never see your money again.
A variation is buy-to-let fraud, where companies offer to source, renovate and manage properties, claiming good returns from rental income. In practice, the properties are near-derelict and the tenants non-existent.
How does property fraud affect me?
You attend a free presentation about making money from property investment. The fraudsters may persuade you to hand over money to sign up to a seminar or course promising to teach you how to make money dealing in property.
You might be offered the opportunity to buy properties that have yet to be built at a discount. You will be asked to pay substantial joining fees that you may lose, and you may end up with no property.
You might think property investment is a fast way to get rich quickly, so you invest some, maybe all, your hard-earned savings.
What you don't know is that the land is either agricultural or derelict. In many cases, it is unsuitable for development, or is bound to have planning permission refused.
As a result, you may lose all the money you invested.
What you should do
- Be very wary of mail solicitations, no matter how good they look. Check out the company first. For example: does it have a proper street address and landline number?
- Ask questions about the course. Ask for references from people who've taken it and talk to them. Don’t just speak to one or two people, but several
- Never make investments without thorough research. Find out where the land is. View it before parting with your money. Ask questions locally about its history. Discover whether planning permission has been applied for or granted. If not, what are the prospects of winning planning permission?
- Don't invest until you see detailed plans for the site’s development.
- Contact the police, Action Fraud and/or the Financial Conduct Authority. Always make sure you have copies of all paperwork about the transactions and the course, as well as notes of any phone conversations.
If you aren’t living in the property you rent out, it’s important to keep Land Registry updated of your contact address. This helps to reduce the risk of property fraud occurring. Up to three addresses are allowed including email addresses, addresses abroad and the address of someone you trust. You can find out more on the Land Registry website.