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There has been a recent spate of cases revolving around fraudsters acquiring properties by using false ID documents and then selling them on to unsuspected buyers. They then disappear with the money before the fraud is discovered. So what can the true owner do when they suddenly find someone says they own their property?

As you would perhaps guess, the actions of the solicitors involved will be closely investigated to see if there is any claim against them for professional negligence.

The recent case of Patel v (1) Freddy’s Ltd (2) Chief Land Registrar and (3) Finegold [2017] gives an example of this type of claim. Mr Patel bought a property in London as a rental investment. He lived abroad and a relative managed the property. A fraudster impersonating Mr Patel instructed solicitors to sell the property to a purchaser who in turn proceeded to sell the property to the Defendant. The Defendant became registered as the new proprietor at the Land Registry.

When the fraud was discovered, Mr Patel claimed that the Defendant’s solicitors had failed to properly check the fraudulent seller’s title to the property. However, the High Court disagreed and held that the Defendant’s solicitor had not been negligent as it was the task of the seller’s solicitors to check the identity of their client and that they really owned the property.

The court confirmed that it is not normal conveyancing practice for the buyer's solicitors to check the identity of the seller. It is the seller's solicitor in a conveyancing transaction who should check the identity of their client. The buyer's solicitor is not required to duplicate the checking of the seller's identity or to check that the seller's solicitor has done so.

However, this case emphasises the importance for professional advisers of remaining alert to the possibility of fraud. This case highlights that there may be special circumstances that require an extension of the buyer's solicitor's duty beyond normal professional practice. It is important to note that each case will turn on its own particular facts and circumstances but this decision provides a helpful example of the court's approach to considering whether such special circumstances exist.

Seek specialist property conveyancing advice by contacting David Rogerson at Chattertons 01636 675563 or david.rogerson@chattertons.com

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