Identity Documents Required
The risk of fraud in the legal market has significantly increased and become an attractive target for fraudsters, particularly in conveyancing. The long-awaited judgement in Dreamvar (UK) Limited v Mischon de Reya  made it even more difficult for property Solicitors to ensure that money laundering checks are carried out with proper due diligence.
Solicitors have strict rules and regulations that must be followed when it comes money laundering and ID checks. Solicitors must comply with the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017. Before a Solicitor can proceed with any type of transaction, it is vital for clients to provide their photographic identification and proof of address. If client do not wish to provide their ID documents, Solicitors will not be able to proceed with the transaction.
Whilst providing ID documents may seem like a chore and unnecessary, Solicitors must ensure that the person providing ID is who they say they are and that they are entitled to sell or purchase a property. An example of not carrying out adequate checks on clients could result in fraudsters who act as sellers taking buyers purchase funds and not actually selling the property as the fraudsters would not own it. This was shown in Dreamvar.
The following documents are required from clients in property transactions when providing their photo ID and proof of address: –
- Current full national passport or;
- Current full national driving licence;
To comply with the regulations, Solicitors require certified copies of either a passport or driving licence. At Bhogal & Co. Solicitors, we require specific wording to be used when these documents are certified, and this can be done from a firm of solicitors local to clients. Alternatively, clients can attend our offices with their original documents, and we will be able to take copies and verify the clients ID.
Proof of Address
- Original utility bills e.g. gas, electric or water bill or;
- Original Council Tax demand or;
- Original Bank statement;
The same will apply to proof of address documents. Solicitors will require certified copies as stated above or alternatively, clients can visit the offices with the original documents and copies will be taken.
Source of Funds
It is important for Solicitors to know how a property transaction is to be funded and so from the outset of the transaction Solicitors will always require proof of source of funds especially if the transaction is to be funded privately. Solicitors are required to be vigilant as firms are at a high risk of being victims to money laundering and so, important checks are carried out in respect of source of funds.
What do we require?
If the transaction is to be funded from a savings account or a current account, Solicitors will need the original bank statement showing the funds accumulated in the account. It is vital that the bank statements show the name of the bank, the clients name and their address.
Transfer of Funds Between Accounts
If money has been transferred from one account to another, Solicitors will need bank statements showing the funds in the original account and then another bank statement showing the money received into the account it was transferred to. It is important that Solicitors have proof of where the funds initially came from.
If you are receiving a gift from a family member or a friend, Solicitors will require a confirmation letter from the person giving the gift. Solicitors will also require bank statements showing the funds in the account of the person giving the gift and then bank statements showing the funds being received into the clients account.
Solicitors must obtain the above documents in all transactions and cannot proceed without them as Solicitors must comply with regulations.