Property Fraud & Conveyancing Transactions

In his latest blog, Conveyancing Solicitor Matt Rice discusses property fraud and conveyancing transactions….

Property fraud is one of the most profitable ways a fraudster can earn large sums of money. In these uncertain times, and with people ever increasingly working remotely from home, the Solicitor’s Regulation Authority (SRA) has released a warning about this type of crime.

Property Fraud & How We Are Working

The pandemic and Government lockdowns have caused many difficulties for firms. The restrictions have made it challenging to carry out verification of our client’s identification and source of funds checks. The SRA are reminding conveyancers of the importance of knowing our customers and has stipulated that ‘electronic verification tools can help firms carry out these tasks’.

But it is important to use these tools correctly and appropriately. At Timms, we have made sure that we have effective systems and procedures in place to mitigate the challenges brought by dealing with customers largely online.

Property Fraud – Things To Look Out For

One area of particular concern is vendor fraud, which primarily targets the elderly and the vulnerable. Properties are being put up for sale by fraudsters without the consent or knowledge of the genuine owners – which are typically homes owned by elderly or vulnerable people.

Some of the “warning bells” that we are trained to look out for include:

• The property price is significantly over or under the market value
• The seller or buyer is reluctant or unable to provide documents
• ID documents do not look genuine
• There is pressure to complete the transaction very quickly
• Minimal work is instructed, for example, no searches are requested
• There are complex or unusual circumstances around the transaction
• It is a cash purchase of a property
• Funds are coming from or going to unconnected third parties

The SRA has also warned for a need to be even more alert due to the effects of the stamp duty land tax (SDLT) holiday, which has also caused a pent up of demand for property transactions. In a rush by buyers to complete before the SDLT holiday ends, the value of properties has been driven up substantially and there is a further risk of conveyancers being used to launder money by criminals.

At Timms, we ensure that our conveyancing staff receive regular training on fraud risk factors, and are made aware of both new “scams” as well as established fraudulent methods. The risk of fraud is kept under constant review as a transaction progresses. As well as our own clients we check the details of other conveyancers in the transaction and seek clear evidence linking the seller to the property.

Matt Rice
February 2021