Published 6th October 2012; Updated 29th November 2018 / April 2021
The quick answer is YES!
Here is a true horror story of how a teacher in Hove had his house stolen.
In 1998 Mr Hawthorn decided to take a sabbatical from his job as a science teacher in Sussex. He rented out his home in Hove and went as a volunteer to Laos. In 2000 he decided he would stay on in Laos permanently.
His house in Hove was mortgage free and the rent helped pay for his living expenses in Laos. All went well until in 2005 his letting agents sent a message to him saying his house in Hove had been repossessed by GMAC which had security on the house.
In April 2005 the agents had found a new tenant called Mr Manning. He passed the referencing checks and paid six months’ rent in advance as well as a deposit. He never spent a night in the house. He collected utility bills addressed to Mr Hawthorn, the owner. One week after the start of the tenancy Mr Manning went to a mortgage broker and claimed to be Mr Hawthorn. When asked to produce evidence of identity he produced a driving licence bearing the name of Mr Hawthorn. Mr Manning was advised to apply to the Cheltenham and Gloucester Building Society. On his application form he gave details of a generous income and his employer’s details. The employer did not exist but Mr Manning had arranged for an answering service to answer with the name of the company and confirm the connection with the bogus Mr Hawthorn. The Cheltenham and Gloucester then wrote to the employer (actually a mail-box service in London) and were not satisfied with the reply received. Mr Manning’s application was turned down.
Mr Manning went back to the broker and this time an application to GMAC was successful. Mr Manning had mortgaged Mr Hawthorn’s house for £207,495. Mr Manning had succeeded in using the same driving licence and utility bill to open a bank account in the name of Mr Hawthorn at a Lloyds TSB branch. He paid in the cheque for £207,495 and then withdrew it as cash, and disappeared.
By October that year no repayments had been made to GMAC and it exercised its rights to repossess the property. And it changed the locks. Mr Hawthorn’s brother was the first to find something wrong when new tenants complained that the keys they had been given did not work.
Then we come to the twist in the tale. On application to the Land Registry Mr Hawthorn’s representatives were told that the law only permits a change in the Title recorded by the Land Registry if an entry has been made “by mistake”. Of course, there had been no mistake. The charge in favour of GMAC was quite deliberate. It was therefore not possible to remove the charge, and with a charge the repossession was quite lawful in the absence of repayments. And this is where you feel that there is some good in the world; GMAC (which takes pride in its anti-fraud measures) withdrew the repossession notice and accepted the loss. The property was returned to Mr Hawthorn.
You are more at risk if:
- your identity has been stolen
- you rent out your property
- you live overseas
- the property is empty
- the property is not mortgaged
- the property is not registered with HM Land Registry
HM Land Registry recognises the risks described in this article and makes available at very low-cost tools to help you protect yourself from property theft. Do please look at the Government website for further details.
The information contained in this article is believed to be correct at the time of publication. The content of this article is intended to be a brief summary of the principal points of the legislation or proposed legislation only, and it is provided for general guidance only. It may not take into account subsequent changes in the law and of necessity it omits much detail. Taxation is a complicated subject and is subject to change. You should only rely on advice prepared specifically for you. Neither the writer nor Landlords Tax Services Ltd can be held liable for any loss arising from any act or omission by you as a result of your understanding of this article. If the subject matter is of interest you should contact us to see if there is a relevant update, and to take professional advice which takes into account your circumstances.