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Why your identity matters so much when buying or selling a house.

Why your identity matters so much when buying or selling a house.

When you instruct a solicitor to buy or sell a house for you they will always ask for proof of your identity and address. If you are a buyer, you will also be asked for information about the money that you are using to make your purchase. We understand that providing this documentation might seem like a chore but all legal firms are obliged by law to make these checks and they are carried out for a very important reason.

For most of us, buying or selling a house is a significant life event. But for criminals, the buying and selling of property has long been an attractive way to commit fraud or to launder money (money laundering is the process of hiding illegally acquired funds or“laundering” them, through legitimate transactions such as house buying).

There are a number of regulations in place aimed at identifying and blocking this criminal activity.

Property Fraud

Fraudsters sometimes impersonate others to sell property they do not own or to attempt to purchase properties with funds that are not theirs. So whether you are buying or selling a property, all solicitors will ask you for documentation which proves your identity and address so that they can be satisfied as far as possible, that you are who you say you are and that you are legally entitled to sell the property.

You will be asked to provide evidence of your identity and address such as a current passport or photo driving license – a full list of the documents that can be accepted will be provided by your solicitor.

Money Laundering

You will also be asked to provide information about the money that you are using to purchase the property (you might hear this referred to as “Proof of Funds.”).

Money Laundering Regulations require that your conveyancing solicitor establishes a paper trail demonstrating firstly that the money definitely exists (you'd be amazed, sometimes it doesn't!), and also that the funds have come from a legitimate source, not a criminal one.

Take for example a £20,000 deposit which appears in a buyers account from another individual – it almost certainly represents nothing more than a helping hand from a relative or friend but this money would still have to be tracked back to validate that it has not been the proceeds of criminal or fraudulent activity.

So if you are receiving financial help from a family member or friend to buy a property, do be aware that during the conveyancing process Money Laundering Regulations will require them to provide information about where this money came from. Do make sure that they are happy to submit to these checks and that they understand why it's necessary.

Once you have chosen Close Thornton to carry out your conveyancing, we will ensure you know what documentation will be needed so that you have time to gather everything together and to resolve any issues.

Cyber Security Matters: Friday Afternoon Fraud – Protect Your House Deposit

You may not have heard this expression but email hacking of conveyancing transactions is one of the most common cyber-crimes. This crime has become known as "Friday Afternoon" fraud as it is the day on which many home buying completions take place.

The criminals will generally hack into the email systems of a firm of solicitors and intercept the emails travelling back and forth between home buyers and their solicitor. The fraudsters will search for emails which contain details of the solicitor's bank account into which a house deposit is to be paid.

The fraudsters will intercept this email and change the bank account details to their own so that the unwitting buyer transfers their deposit into the criminals' own account.

Close Thornton has put in place procedures to protect against fraud of this kind but we must all remain alert to the threat posed to conveyancing transactions by cyber criminals.

If during the sale or purchase of your house you receive any suspect communication please make contact with your solicitor by phone as soon as possible and please do not respond to any communications which give you cause for concern - simply contact Close Thornton on 01325 466461 for advice.

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