5 Property Frauds to Detect and Avoid
Education Desk
Property fraud in Australia costs homeowners and investors millions of dollars each year. Being aware of common scams can help protect your hard-earned money and prevent the heartache of falling victim to fraudsters.
1. Title Fraud
Title fraud occurs when criminals steal your identity to sell or mortgage your property without your knowledge. This sophisticated scam involves fraudsters using forged documents to transfer ownership of a property.
In 2018, a Sydney homeowner discovered someone had sold their investment property worth $900,000 without their knowledge, using falsified identity documents. While relatively rare, these cases can be devastating.
How to avoid it:
Register for property alerts with your state's land registry office
Consider applying for a title lock where available
Regularly check your credit report for unauthorized activity
Secure your personal identification documents
2. Rental Scams
Rental scams typically involve fraudsters advertising properties they don't own, collecting deposits and rental payments from unsuspecting tenants who never gain access to the property.
The ACCC's Scamwatch reported Australians lost over $8 million to rental scams in 2023 alone, with younger renters particularly vulnerable in competitive rental markets.
Warning signs:
Below-market rent in desirable locations
Requests for payment before viewing the property
Reluctance to meet in person or show the property
Pressure to transfer money quickly
Poor quality or stock listing photos
3. Investment Scheme Fraud
Property investment scheme fraud involves promoting "guaranteed" high-return property investments that either don't exist or are significantly misrepresented.
In 2022, ASIC took action against multiple property investment schemes that collectively cost Australian investors over $25 million.
Red flags to watch for:
Promises of unusually high returns with "no risk"
Unsolicited investment offers
High-pressure sales tactics
Lack of proper documentation
Claims of "exclusive" or "time-limited" opportunities
4. Deposit Theft
This scam targets home buyers during the settlement process. Hackers intercept email communications between buyers and their solicitors or conveyancers, then send fraudulent payment instructions for the deposit.
According to the Australian Cyber Security Centre, email payment redirection scams (including property deposit theft) resulted in losses exceeding $80 million in the 2022-23 financial year.
Protection strategies:
Always verify banking details by phone before transferring large sums
Be suspicious of last-minute changes to payment instructions
Enable multi-factor authentication on email accounts
Use secure communication channels for sensitive financial information
Consider using PEXA (Property Exchange Australia) for secure settlements
5. Building Inspection Fraud
Building inspection fraud takes two common forms: either dishonest inspectors who provide inadequate assessments, or scammers posing as inspectors who take payment without performing proper inspections.
The Queensland Building and Construction Commission reported over 200 complaints about building inspection services in 2023.
How to protect yourself:
Only use licensed inspectors registered with relevant state authorities
Check credentials and read reviews from previous clients
Get recommendations from trusted sources
Ensure the inspector carries professional indemnity insurance
Attend the inspection in person when possible
Request a detailed written report with photographs
Staying Protected in the Australian Property Market
Property transactions represent some of the largest financial decisions most Australians will make. Taking precautions and maintaining skepticism toward too-good-to-be-true offers can save you from becoming a victim.
If you suspect you've encountered a property scam, report it immediately to your state's consumer protection agency, the ACCC, and if financial fraud is involved, to the Australian Federal Police.
Remember, legitimate property transactions should always involve proper documentation, verification processes, and transparent communication. When in doubt, consult with a qualified legal professional before proceeding with any property transaction.
Have you encountered suspicious activity in your property dealings? Share your experiences in the comments below to help others stay vigilant.
This article is for informational purposes only and does not constitute legal advice. For specific concerns about property fraud, consult with a qualified legal professional.