Electronic checks and balances throughout the property sales transaction process need to be enforced to better protect the seller from a fraudulent sale, according to the Australian Institute of Conveyancers’ Tasmanian division president Helen Kent.
Referring to a recent news story about a Perth property investor whose Perth property was sold through a scammer in Nigeria while he was overseas, Kent said this could have been prevented if the proposed electronic conveyancing system was in place.
She said it’s particularly relevant for interstate or international investors who don’t necessarily deal with agents, banks, conveyancers and solicitors face-to-face but can have their identity checked through a streamlined verification process.
“The real estate agents may hate it because it’s an additional form for them to fill out but they’re the first port of call for vendors and in the case of the Perth investor it was where the fraudulent sale process first started,” said Kent.
“It’s all very well to see an email saying ‘I’d like to sell my property’, but agents also need to take responsibility in verifying identities.
“The electronic client authorisation form has been in the pipeline for quite some time,” she said.
But Kent now demands that the electronic form development process speed up to provide better protection for vendors.
Another related issue that needs to be addressed is the record of signatures, she said. “Presently the only document where a purchaser’s signature is recorded is at the Land Titles Office on the mortgage papers, as purchasers in Tasmania aren’t required to sign the transfer document.”
She said in the case where a property owner pays cash for a property there is no record of that property owner’s signature.
“This should also become part of the electronic process so it can be easily accessed online (by the appropriate people) for verification purposes,” said Kent.
She also encourages investors to ensure their title is in a safe place where their will or other valuable documents are kept.
“This is just another necessary safeguard measure vendors must take. Purchasers and property owners may also safeguard themselves against fraud by taking out title insurance,” she said.
The Perth investor’s scenario should be a wake up call to all involved in the sales process that they must always check identification, said Kent.
The same applies to property managers when a ‘so-called’ property owner wants them to manage a property.
Kent said in a situation recently, a tenant fraudulently represented himself to the property manager as the owner of the property he tenanted so he could sub-lease the property to students for a higher price than he was paying.
Fortunately he didn’t get away with it and was caught out, but this situation is happening, said Kent.
Source Australian Property News
Thursday, September 30, 2010
Saturday, September 18, 2010
Helpline runs hot with gripes about estate agents
Jason Dowling the age
September 18, 2010
EVER thought a property you were interested in was underquoted? Not happy with a real estate agent?
You're not alone. More than 10,000 calls were made last financial year to a helpline for those concerned about the conduct of Victorian real estate agents. Consumer Affairs dealt with 661 disputes involving agents, leading to settlements totalling $223,284.
In one case, a consumer paid a holding deposit on a block of land and the block was later sold to another buyer who paid a full deposit.
Other cases include a buyer who was told a property had a lock-up garage when it only had a carport, and a property falsely advertised as having reverse-cycle heating and cooling.
In July, Consumer Affairs conducted a blitz on underquoting that led to two prosecutions. A separate analysis of complaints to Consumer Affairs about misleading pricing ''found possible breaches in nine cases''.
Formal warnings were issued to six agents advertising less than the vendors' recorded asking/reserve price - letters were also sent to two agents ''to educate'' on price advertising.
Civil action was taken against Stockdale & Leggo (Craigieburn/Roxburgh Park) alleging misleading price advertising of three Craigieburn properties. ''One property was advertised as 'private sale: $290,000 plus', despite the authorised sale price being $330,000,'' the Consumer Affairs annual report stated.
Despite the breaches, Real Estate Institute of Victoria spokesman Robert Larocca said agents generally do the right thing.
He said the number of Consumer Affairs inquiries relating to real estate agents had declined, while the number of house sales had increased.
September 18, 2010
EVER thought a property you were interested in was underquoted? Not happy with a real estate agent?
You're not alone. More than 10,000 calls were made last financial year to a helpline for those concerned about the conduct of Victorian real estate agents. Consumer Affairs dealt with 661 disputes involving agents, leading to settlements totalling $223,284.
In one case, a consumer paid a holding deposit on a block of land and the block was later sold to another buyer who paid a full deposit.
Other cases include a buyer who was told a property had a lock-up garage when it only had a carport, and a property falsely advertised as having reverse-cycle heating and cooling.
In July, Consumer Affairs conducted a blitz on underquoting that led to two prosecutions. A separate analysis of complaints to Consumer Affairs about misleading pricing ''found possible breaches in nine cases''.
Formal warnings were issued to six agents advertising less than the vendors' recorded asking/reserve price - letters were also sent to two agents ''to educate'' on price advertising.
Civil action was taken against Stockdale & Leggo (Craigieburn/Roxburgh Park) alleging misleading price advertising of three Craigieburn properties. ''One property was advertised as 'private sale: $290,000 plus', despite the authorised sale price being $330,000,'' the Consumer Affairs annual report stated.
Despite the breaches, Real Estate Institute of Victoria spokesman Robert Larocca said agents generally do the right thing.
He said the number of Consumer Affairs inquiries relating to real estate agents had declined, while the number of house sales had increased.
Tuesday, September 14, 2010
The Nigerians are coming - title fraud in WA
Aja Styles
September 13, 2010 - 5:55PM
Property sales should be better policed in the wake of a scam that resulted in Perth man Roger Mildenhall having a property sold without his knowledge, the Real Estate Institute of Western Australia has admitted.
Mr Mildenhall was living in Cape Town when his Deanmore Road duplex in Karrinyup was sold without his knowledge for $485,000 in June by Nigerian-based scammers purporting to be him.
The scammers then tried selling his Hale Road home in Wembley Downs, which was full of his furniture and two cars, but were foiled when a neighbour alerted Mr Mildenhall to the sale.
REIWA chief executive, Anne Arnold, has called for more secure documentation methods, particularly over land title transfers, to be overseen by the state government.
"The Certificate of Title is a tradable commodity, just like cash, so it's probably time for Landgate to look at more sophisticated security measures on the actual document, such as a microchip as we have on our passports," Mrs Arnold said.
"This scam was very slick, but the key point at which it could have been detected was during the settlement process.
"The fact that the scammers were able to either forge a Certificate of Title or trick Landgate into issuing a new certificate of title, means we really need to look at much greater levels of security around the actual document itself.
"Under the Act, agents are required to search the title at the time of listing a property, but the bona fides of the seller are not required to be checked. In most cases agents are dealing with clients that they know so it's not an issue."
She said it was her understanding that once the Certificate of Title has been registered by Landgate, the transaction was complete and the property has changed hands, so it was unlikely that Mr Mildenhall would be able to recover the property.
Mrs Arnold said REIWA would be working closely with the Real Estate and Business Agents Supervisory Board to review current protocols, but doubted that identity checks on sellers would have prevented this particular case from occurring.
She said that agents were finding that an increasing number of properties were being sold online and on instructions to agents via emails, faxes and phone calls, with little or no face-to-face interaction with sellers.
"While these methods are very convenient for interstate and overseas buyers and sellers, it is now more important that everyone involved in the transaction takes steps to authenticate the process and, in particular, the seller's ownership of the property", Mrs Arnold said.
"This has been a 'perfect storm' of events by a very sophisticated outfit which seemed to have a great deal of knowledge about this owner, his property, his overseas movements, and the legal process in WA for selling homes."
Commissioner for Consumer Protection Anne Driscoll agreed that the processes should be reviewed thoroughly.
"It is important that every phase of the sale and transfer process that was undertaken in this instance is reviewed, to ascertain what went wrong," she said.
"This no doubt this will give some clarity about what should/could have been done to prevent it.
"In the interim the two regulatory Boards responsible for the real estate and settlement industries have issued email warning to all licensees in WA asking that they be particularly vigilant to confirm the identity of owners of property and that any signatures on legal documents are verified before proceeding with a real estate transaction.
"Separate to this issue work is being done to develop standards for proposed electronic conveyancing systems. A key area of work is to establish a robust Client Identify Verification Standard."
WA Today
September 13, 2010 - 5:55PM
Property sales should be better policed in the wake of a scam that resulted in Perth man Roger Mildenhall having a property sold without his knowledge, the Real Estate Institute of Western Australia has admitted.
Mr Mildenhall was living in Cape Town when his Deanmore Road duplex in Karrinyup was sold without his knowledge for $485,000 in June by Nigerian-based scammers purporting to be him.
The scammers then tried selling his Hale Road home in Wembley Downs, which was full of his furniture and two cars, but were foiled when a neighbour alerted Mr Mildenhall to the sale.
REIWA chief executive, Anne Arnold, has called for more secure documentation methods, particularly over land title transfers, to be overseen by the state government.
"The Certificate of Title is a tradable commodity, just like cash, so it's probably time for Landgate to look at more sophisticated security measures on the actual document, such as a microchip as we have on our passports," Mrs Arnold said.
"This scam was very slick, but the key point at which it could have been detected was during the settlement process.
"The fact that the scammers were able to either forge a Certificate of Title or trick Landgate into issuing a new certificate of title, means we really need to look at much greater levels of security around the actual document itself.
"Under the Act, agents are required to search the title at the time of listing a property, but the bona fides of the seller are not required to be checked. In most cases agents are dealing with clients that they know so it's not an issue."
She said it was her understanding that once the Certificate of Title has been registered by Landgate, the transaction was complete and the property has changed hands, so it was unlikely that Mr Mildenhall would be able to recover the property.
Mrs Arnold said REIWA would be working closely with the Real Estate and Business Agents Supervisory Board to review current protocols, but doubted that identity checks on sellers would have prevented this particular case from occurring.
She said that agents were finding that an increasing number of properties were being sold online and on instructions to agents via emails, faxes and phone calls, with little or no face-to-face interaction with sellers.
"While these methods are very convenient for interstate and overseas buyers and sellers, it is now more important that everyone involved in the transaction takes steps to authenticate the process and, in particular, the seller's ownership of the property", Mrs Arnold said.
"This has been a 'perfect storm' of events by a very sophisticated outfit which seemed to have a great deal of knowledge about this owner, his property, his overseas movements, and the legal process in WA for selling homes."
Commissioner for Consumer Protection Anne Driscoll agreed that the processes should be reviewed thoroughly.
"It is important that every phase of the sale and transfer process that was undertaken in this instance is reviewed, to ascertain what went wrong," she said.
"This no doubt this will give some clarity about what should/could have been done to prevent it.
"In the interim the two regulatory Boards responsible for the real estate and settlement industries have issued email warning to all licensees in WA asking that they be particularly vigilant to confirm the identity of owners of property and that any signatures on legal documents are verified before proceeding with a real estate transaction.
"Separate to this issue work is being done to develop standards for proposed electronic conveyancing systems. A key area of work is to establish a robust Client Identify Verification Standard."
WA Today
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