NETHERLANDS - The Dutch government is stepping up its efforts to prevent property fraud by tightening rules for notaries, surveyors and brokers.

A new national body, known as the Regiegroep Aanpak Misbruik Vastgoed, will be created in a bid to increase the integrity of service providers, improve transparency and supervision as well as implement a mix of preventative, governing, fiscal and penal measures, the ministers Ernst Hisch Ballin (Justice), Wouter Bos (Treasury) and Guusje ter Horst (Home Affairs) have written to parliament.

These latest developments follow a large-scale fraud at the Philips' pension fund, where several ex-executives are suspected of committing fraud by swindling their employers out of tens of millions of euros but are also thought to be related to problems in the residential housing market.

BPF Bouwinvest, the property investment manager of the large industry-wide scheme BPF Bouw, revealed in September it may also have lost between €2m-€3m in a suspect transaction as well.

Since 1 August 2008, financial institutions and service providers have already been subject to tightened rules to prevent real estate fraud.

That said, this new body's initial focus will be on notaries, who will be directly informed by the Land Registry (the Kadaster) if unusual prices rises occur during the sale of a property.

Notaries will also get access to the register of the real estate for the property tax WOZ, ministers have announced.

At the same time, the supervision of notaries will be increased, while they also have to make transaction-related documents public if requested so any pledge of secrecy and non-disclosure rights will be limited.

The ministers will also consult representative organisations of surveyors and brokers on how to prevent fraudulent transactions, they said while a surveyors' institute, the Nederlands Woning Waarde Instituut, will also be established.

According to the government, the property sector is vulnerable to abuse, because of the its scale of its assets, as well as its lack of transparency and the low odds of detection - until now.

"The possibility of manipulation of value and price-making, in combination with opaque purchase and sale constructions, offer margins for money-laundering and fraud," it explained.

The Dutch Association of Institutional Property Investors (IVBN) recently extended its earlier framework to prevent fraud in institutional real estate investments, following the Philips pension scandal.

"After our proposals, the announced measures do not seem to contain anything we should still take heed of," said Frank van Blokland, director of the IVBN commented to IPE.

"So far, I have not seen a reason for stepping up our activities," he added.

According to Van Blokland, the government's rules are aimed mainly at the housing mortgages sector, where some notaries and property agents have colluded to commit fraud.

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