Knowing your client has taken on a new meaning in the wake of a recent scam where a Perth investor had his property sold without his knowledge. Now, more than ever, it’s essential for both real estate and settlement agents to carefully identify their clients.
Agents should, where possible, meet their clients personally. A 100-point identity check, similar to that used in financial transactions, is advisable. Where clients aren’t local it is advisable for documents to be witnessed by a solicitor or other notary public. It is their job to certify and attest to the identity of the party.
Regular in-person communication is one of the best safeguards. Dealing directly with a person will assist to see if they are genuine or not. Where the party is unknown one needs to be even more vigilant.
Most transfers of land or settlements are done by a client appointing a settlement agent and the transaction is processed through the mail or over the phone. In some cases there is no contact at all with the client.
When electronic conveyancing is introduced identification by means of a 100-point check will be mandatory. This will require written confirmation that all the information is correct.
Update: As of January 2013, sellers are required to undergo a thorough verification of identity process.
Agents are wise to act now. While the case is still fresh in the public mind introducing mandatory identity checks will demonstrate that an agency is both proactive and professional.