LEGAL UPDATE: Conveyancing Fraud Latest
An important ruling from the Court of Appeal could well have an impact upon the insurance premiums of conveyancing and property solicitors.
Mary Monson Solicitors acted for a fraudster, who purported to sell a property they did not own, using forged documents to pretend they were the owner. They have disappeared with over £1m.
When the Land Registry couldn’t register Dreamvar as the new owner, Dreamvar sought compensation from the party responsible.
However, it was not straightforward to work out who was responsible for paying compensation. The first court found Mary Monson not liable for breach of trust or breach of undertaking, because they only confirmed they were acting for their client, not for the owner of the property.
Dreamvar then turned their attention to their own solicitors, Mishcon de Reya. The court found that Mishcon de Reya had acted honestly and reasonably, but said that they were nevertheless inn breach of trust, seemingly because Dreamvar were not insured and Mishcon were.
The Court of Appeal also overturned the decision of the first Court and said that (even though, strictly speaking they couldn’t find the firm liable) Mary Monson had to make a contribution to the sum awarded to Dreamvar.
As a result of this case, all conveyancing solicitors will be treading more carefully, but there were warning signed which the conveyancing solicitors should have taken into consideration:
- they were instructed in Manchester to sell a property in London;
- the property had no mortgage;
- the sellers wanted to rush it through quickly;
- exchange and completion took place on the same day; and
- the proceeds were sent straight out of the UK and directly to China.
If you own a property that you don’t live in, which has no mortgage, you could potentially be targeted by conveyancing fraudsters. However, you can sign up to the Land Registry alert system, which will contact you if there is any activity against your title. Even if you own your property, and have a mortgage, its a good idea to sign up anyway.