Property scams - what to look out for in the sale and transfer process, and legal safeguards for buyers, sellers, and agents:
Property fraud and scams are an increasing concern in South Africa. With rising property values and demand, criminals exploit loopholes and unsuspecting individuals to illegally transfer, sell, or mortgage property.
Understanding common fraud schemes and the legal safeguards in place is critical for property owners, buyers, and estate agents to protect themselves.
Common Types of Property Fraud
Criminals forge documents to illegally transfer property into their name or secure loans against it.
They may impersonate the owner or submit fraudulent powers of attorney. Take care to scrutinise ID documents presented by individuals.
Fraudsters pose as estate agents or property owners and solicit deposits from unsuspecting buyers.
Often, properties are either already sold or not owned by the fraudster. Never pay money to any party except for attorney's firms handing the conveyancing transfer of ownership and verify their Trust account banking details.
Fake landlords advertise properties for rent that they do not own.
Deposits and rent are paid upfront, but tenants never gain access.
Always ask to see proof of ownership of the property being rented.
Criminals use forged identity documents to secure property bonds, leaving the real owner liable.
These scams can have devastating financial consequences and create legal complications for all parties involved.
Legal Safeguards in South Africa
South African law provides several mechanisms to prevent and address property fraud:
All property transfers must be registered at the Deeds Office.
Ownership only legally changes once the transfer is recorded in the title deed.
This centralised system makes it difficult for fraudsters to sell property without detection.
Registered estate agents must have a valid Fidelity Fund Certificate (FFC) under the Property Practitioners Act.
This ensures that agents are properly regulated and that client deposits are protected. Ask to see your Agent's certificate.
Transfers of property must be handled by qualified conveyancing attorneys who verify ownership, identity, and documentation.
They check municipal rates, clearance certificates, and bond instructions to prevent fraudulent transactions.
Fraudulent transactions may be prosecuted under the Criminal Procedure Act or Common Law fraud provisions.
Civil remedies may also allow the recovery of money or annulment of fraudulent transfers.
Title deed tracking, certified copies of identity documents, and verification of estate agent credentials all reduce the risk of scams.
Practical Steps for Buyers
Buyers can take several precautions to avoid fraud:
Verify ownership: Check the Deeds Office title deed to confirm the seller is the legal owner.
Use registered estate agents: Ensure the agent has a valid Fidelity Fund Certificate.
Pay via traceable methods: Avoid cash payments; use bank transfers or trust accounts.
Use a reputable and registered conveyancer: Never attempt to bypass legal transfer procedures.
Be wary of “too good to be true” deals: Extremely low prices or urgent sales are common red flags.
Practical Steps for Sellers
Sellers also need to protect themselves:
Notify your conveyancer immediately if you suspect fraud.
Do not sign documents under duress or without reading and understanding what you are signing.
Above all, all parties need to be aware of potential fraud and always verify parties, account numbers and the authenticity of the procedure.
Conveyancing contact:
0870210123
info@maclaw.co.za
https://maclaw.co.za/expertise/property-conveyancing/