Property fraud in commercial property

One of the key findings of the Association of Certified Fraud Examiners’ 2022 edition of the Report to the Nations is that organisations lose an estimated 5% of their revenue to fraud each year. In the difficult economic climate created by the COVID-19 pandemic, and more recently the war in Ukraine, that 5% could be the difference between sink and swim for many businesses in the UK.

After the financial services sector, the property sector is the most vulnerable to fraud. The large sums of money involved in property transactions make the sector particularly appealing to criminals. Failing to deal with fraud can lead to dire consequences for individuals and organisations, with punishments ranging from fines to imprisonment. Also, as well as the very real risk of punishment are serious and wide-ranging financial and reputational implications. That is why it is so important for surveyors to educate themselves about fraud, and to understand the steps they can take to protect their revenue and reputation.

COVID-19 had an unprecedented impact on the commercial property sector, with remote working patterns causing a significant reduction in demand for commercial office space. However, according to the RICS Commercial Property Market Survey, Q1 2022 the start of 2022 saw a notable increase in UK office demand. In addition, investor enquiries across all UK commercial property also continued to rise.

Fraud in the commercial property sector evolves year on year, and therefore keeping up to date on evolving trends is important for your own and your organisation’s protection.

This section provides a high-level overview of different types of fraud affecting the commercial property sector. This is followed by an in-depth look at each of these types, focusing on:

  • what it is and what it looks like in real life
  • particular risks to be aware of
  • practical tips for how to protect against it and
  • what to do if you suspect it has occurred.

It finishes with a look at the involvement of the police and courts: how they are involved, what options you have and what to expect.

This section is maintained by Arun Chauhan of Tenet Compliance and Litigation.