Trusts are an effective way to pass property onto heirs - but beware of dishonest trustees

If in the next few months you agree to sell your home and the bank that financed your purchaser’s bond then phones to check that you are indeed the legitimate seller, that the price is as stated in their books and that certain extras included or excluded are a valid reflection of the situation, do not be annoyed by this interference. Such actions, says Bill Rawson, Chairman of the Rawson Property Group, are now very much part of the banks’ duty and should be encouraged and not resented.

“The need for these additional checks,” says Rawson, “has come about because various types of fraud have now become increasingly common in property sales.”

“There have,” he says, “been cases where the seller in fact did not own the home and the true owner did not even know that his house was being sold by the trickster.”

In these situations, says Rawson, the crook, posing as the owner, ensures that the initial confirmatory deposit is paid into his pocket – and then disappears. In some cases far bigger sums – 50% or even 100% of the sales price – have been paid out and are completely lost to such unidentifiable fraudsters.

The bank, for their part acting in good faith, may well pay out the full sum to the so-called seller, only to find that they are left with a home that has to be repossessed and, if sold, is likely to fetch well below the market value – while the true owner is left with a huge legal complication.

In other cases, says Rawson, the true owner and buyer come to an agreement to raise the price of the house above its actual market value, thereby enabling the buyer to get a bigger bond. This, he says, has been especially prevalent when the buyer has wanted a 100% bond which the bank is not prepared to give him. Surprisingly, although the bank will usually send its own valuer to inspect the property, these people can on occasions be persuaded that the higher price is valid.

This becomes possible, says Rawson, because bank valuers often have to assess properties in a wide variety of areas and cannot be expected to be completely up-to-date with values in all of them.

Similar scams, says Rawson, take place every year in the rental market. A home – often a holiday home – will be advertised (perhaps in terminology too vague to pinpoint its exact whereabouts) and then the bogus agent or landlord will pocket the deposit or even the full rental when it is paid in advance of occupation.

“In order to make sure that you are never deceived when purchasing or renting a property,” said Rawson, “always make sure that you use an agent from a well reputed agency that can be held accountable for their actions and who will make sure the seller is who they say they are.”

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