In light of recent press coverage regarding a property scam heard in the High Court in Glasgow we thought it would be useful to discuss the subject of property scams and how you can avoid them. The Glasgow court case is believed to be the longest trial in UK legal history beginning in September 2015 and hearing over 320 days of evidence. This particular scam revolved around a couple who preyed on vulnerable people looking to use their property to repay existing debts. They never received the full value for their property and the title deeds were transferred to other people without their knowledge. So, how can you avoid property scams?
Does it sound too good to be true?
Before we look at specific advice about avoiding property scams the simple measure is, if it sounds too good to be true then it probably is. In order for any transaction to stack up there needs to be something in it for all parties. Irrelevant of whether a potential deal sounds too good to be true, you should take nothing at face value and take professional legal advice to protect yourself.
Use the Internet
While many scams emanate from the Internet it is worth remembering that anybody who has been the victim of a scam or been approached by fraudsters may have posted their experience on the Internet. They may mention names, they may mention places and they may mention an array of different strategies used by the fraudsters. Even if a potential transaction is legitimate there is no harm in researching who you are dealing with, what they have done in the past and their track record for customer satisfaction.
Taking legal advice
If you were buying and selling a property in the traditional manner then you would involve legal representation on your own side. Fraudsters tend to offer a low-cost alternative pretending they are “doing you a favour” by sidestepping the cost of legal representation. As soon as somebody tries to dissuade you from taking legal advice this should start to ring alarm bells. If they have nothing to hide why on earth would they try to persuade you against taking advice?
It is also worth remembering, if you take legal advice and that advice turns out to be wrong then you will have a case against the solicitor in question. This covers your back, gives you some insurance going forward and 999 times out of 1000 it could potentially save you from losing money if indeed the proposition is fraudulent.
Don’t let your heart rule your head
One of the reasons why the Scottish property scam was so successful was because it preyed upon vulnerable people who had just inherited property and were looking to reduce either their own debts or pay inheritance tax. The scam involved the fraudsters taking a part share in properties for an agreed amount which would be enough to sort out the financial difficulties faced by the homeowners. However, when the title deeds were taken to be “amended” all of the property was transferred to a third party and the original homeowner was only drip fed a small amount of the money which was owed.
The title deed to your property is your proof of ownership and under no circumstances should this be amended without taking legal advice. Once the properties were transferred over they could be sold by the fraudsters without any recourse to the original legal owner.
While there is no doubt that fraud still exists in many different forms across all investment markets there are a number of tell-tale signs that a proposed transaction may not be exactly what was promised. If it looks too good to be true then it probably is too good to be true. If you are “persuaded” not to take legal advice then this should set alarm bells ringing. The main reason why fraudsters have been successful in years gone by is because they prey on vulnerable people often in a difficult financial situation. Many of them are simply looking for a way to sort out their financial affairs but unfortunately the fraudsters, as in the Glasgow case, simply make a difficult situation even worse.
If there is one piece of advice we could offer it would be to take legal advice on all property transactions prior to agreeing a deal.