Fraudulent Transfers of Ownership. Properties Worth Hundreds of Millions of Crowns Disappear from the Land Register


In reality it works like this: a forged and fake certified signature suffice for an official to transfer a property to another owner or at least to issue a confirmation for a bank to grant a loan. The fraudsters use loopholes in registering changes in the land registers.

How is it that the swindlers acquire property? One of the ways is that the fraudster becomes a fake representative. They forge a property owner's power of attorney for sale, collateral or donation. The second way is to acquire forged identity papers of an owner of a construction site or land and cooperate with, for example, a real estate agency. The third way is forging a public document. In this case, the fraudster delivers a proposal for deposit to the cadastral office justified by completely forged documents. They do not have authentic papers from a notary, don't cooperate with a real estate agency and of course at this time, the owner is not aware of anything.

"This problem should warn all real estate agencies and also people who want to buy property. They should be more cautious and always work with an established and reliable real estate agency that is in contact with the real owners of the properties on offer," says Michaela Koudelová from Svoboda & Williams.

Every year properties worth several hundreds of millions of crowns are affected by frauds. Last year the Czech police managed to investigate frauds worth almost half a billion of crowns.

Currently there isn't a simple way for affected owners to defend themselves. It is possible to remove fraudulent records in the land register by court decision only. However, the swindlers often don't keep the properties but immediately sell them so a new owner is deceived just as the previous one.

A new Civil Code, which comes into effect next year, (January 1, 2014) will protect people who buy property in good faith, even if the property was sold to them by a fraudster. The Czech Land and Cadastral Office is working with members of Parliament and officials from various ministries to better protect property owners. The Land and Cadastral Office proposes notifying the owners of pending changes to their records via encoded email or SMS.

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