Ever wondered why you have to provide so much ID to your solicitor? This is the reason …

IF you are buying or selling a property, be prepared to face tougher identity checks.

The extra safeguards follow a landmark court decision that the world of conveyancing has been eagerly awaiting.

And while it has received widespread publicity in the legal media, particularly in conveyancing publications, little has been reported in the mainstream press.

So the conveyancing team here at Milners thought it would be helpful to explain why stricter identity checks are now required – and what information you will need to provide.

The changes stem from a long-running court case Dreamvar v Mishcon de Reya. The dispute was brought by buyers who had transferred money to fraudsters posing as property owners – resulting in a claim for £1.1m.

Solicitors for the vendors at the centre of the fraud accepted a driving licence and a TV licence, certified by another solicitor, as proof of their ID.

Ultimately, after a series of court hearings and appeals, judges ruled that solicitors acting for both parties had been at fault.

The solicitors for the vendor had failed to carry out its due diligence on their client; and the purchaser’s solicitors had failed to obtain the confirmation from the vendor‘s solicitors.

Both were ordered to make financial contributions.

The implications for buyers and sellers are far-reaching:

  • Solicitors acting on behalf of the vendors must be able to demonstrate that they have taken steps to verify their client’s identity and, if requested, advise the purchaser’s solicitors of the steps they have undertaken.
  • It is now clear that asking for two forms of ID (one being photographic ID and one being address ID, or certified copies of the same) does not go far enough.
  • Our conveyancing team is already seeing a wealth of weird and wonderful questions from purchase solicitors – ranging from requesting undertakings to filling out forms, to establish the ID documentation we have received from our vendor.
  • This is now being raised in almost every transaction as an initial enquiry

What does this mean for you, our client?

  • Our conveyancing team has not, as of yet, received strict guidance from the Law Society, one of our Regulatory bodies as to the new threshold of ID requirements.
  • There will be no doubt that solicitors representing the purchasers will be wanting to place the liability on the vendor’s solicitors as much as possible by making enquiries as to the vendor’s identity
  • Milners’ conveyancing team will therefore, where possible, require the following action from you, our client:

 

✓      Meeting in person with you if you are local to one of our offices in Leeds, Harrogate and Pontefract. Most of our clients are happy to attend our office to provide their ID documents and this is our gold standard, as you will also get to meet the member of the conveyancing team dealing with your matter. We do appreciate that this may not be possible for some clients.

✓       We may ask for extra forms of ID should the ID presented to us not be acceptable. I.e. a printout of an internet bank statement. We understand that in today’s world of online banking and utility providers, that paper statements may not be forthcoming, and we will therefore require a Council Tax bill for example.

✓      We will also, in some circumstances, run electronic identification checks on you and you will be notified accordingly.

✓      Certified ID documents. Our conveyancing team can only accept certified copy documents if they are the original certified copies i.e. wet signature, and they must be certified by a professional such as a doctor or other practising solicitor.

✓      Where documents are certified by another solicitor we will endeavor to run appropriate Solicitors Regulatory Authority checks to ensure they are a practising solicitor and have had no judgments against them by the SRA.

✓      When we act on your behalf where you are a purchaser, we will be taking all the relevant steps in order to verify that the vendor has been verified to a gold standard, like ours.

 

Following the judgment, we will no doubt see a shift of the old age rule of “buyer beware” to “buyer and seller beware” … and as the old saying goes, in Latin, “Caveat Emptor” there is now a new phrase in conveyancing circles: “Caveat Venditor”!

Should you have any questions or concerns regarding residential property and conveyancing, please do not hesitate to contact this article’s author, trainee solicitor Alexandra Knight, or any member of our residential property and conveyancing team here at Milners on 0113 245 0852, 01423 530103 or email us at hello@milnerslaw.

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