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.

About the Author

Peter Fletcher

Peter began his real estate career in 1985 selling tin shacks and red dirt in Kalgoorlie. Moving to Perth in 1989 he quickly moved into agency ownership. By 2006, Peter had built a thriving agency managing over 600 rental properties. He then sold the business, taking time out of the industry to complete Honours in a Bachelor of Arts. Peter is now the Managing Director of Residential Settlements in Burswood and an active Army reservist. Peter has had just one hot shower since the 10th of May 2008.