Streamlined identity checks required to prevent property fraud

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