Conveyancers help to fight crime

Solicitors always ask clients for lots of information when they are buying a property. Two of the most important pieces are identification and Source of funds. 

Solicitors  gather this information to ensure their clients are who they say they are and to play their part in preventing crime.

In this Article Katie Easter, trainee with MJP Conveyancing, looks to explain the reasons behind the inquiries solicitors undertake to ensure as best they can that they are not used a a conduit for criminality. 

Anti-money Laundering

Source of funds is closely linked to anti-money laundering purposes. Identification takes away the possibility to commit money laundering whilst remaining anonymous. It can also make it easier to catch previous offenders. Establishing the source of a client’s funds when purchasing a property allows law firms to be vigilant against any suspicious sources. This helps to prevent criminals passing the proceeds of crime though law firms’ client accounts.

The ‘risk profile’

Law firms are encouraged to build a ‘risk profile’ of their clients with the information gained from identification and source of funds. Each client can be considered low or high risk in relation to money laundering depending on the source of their funds and any discrepancies between identification documents. 

Once a client’s risk is ascertained, any changes to this throughout the transaction can alert a law firm to the possibility of untoward behaviour.

At MJP we use a Source of Funds form with questions such as:

·         Are you purchasing with the help of a mortgage?

·        Please also ask [any other] party concerned to produce evidence of identification in the form of a passport or photo card driving licence and a utility bill delivered within the past two months

These help us to build a picture of each client to enable us to monitor the possibility of criminal activity throughout every transaction.

Cash Purchasers

Law firms are advised to ask for additional documentation to show their client’s source of funds where there is the potential for more risk. 

Cash purchasers can be considered more of a risk compared to individuals purchasing with the aid of a mortgage because mortgage providers carry out their own checks against each customer. In contrast, cash in a bank account is not necessarily ‘clean’ and cash purchasers can therefore find that they are asked for more information about where their funds originate from.

Why has the person giving me a cash gift for my property also been asked for identification?

All money coming into a law firm should be monitored with the use of identity and source of funds checks.  This includes money that comes from an individual that may not actually be a client. This is intended to prevent clients attempting to purchase property with another person’s funds that could be the proceeds of crime. 

The main thing to note

Clients can be concerned that law firms are actively seeking to accuse them of money laundering. This is not the case. Although law firms and particularly conveyancing departments are responsible for ensuring that the proceeds of crime do not pass through the firm’s accounts, they are not policing money laundering. 

Law firms strive to maintain constant vigilance to prevent crime without handing in every cash purchaser and wealthy client that is purchasing a property!

Morgan Jones and Pett are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877000 or via email at davidpett@m-j-p.co.uk

I am frustrated with my conveyancer

‘I am frustrated with my conveyancer as the whole process is taking far too long’ - I hear this from time to time despite the efforts we make at the outset to manage a client’s expectation.  It’s easy to blame and vent anger in the direction of the conveyancer but more often than not the source of the frustration lies elsewhere.

For most home buyers, once they have had an offer accepted on the property of their dreams the next thing they want to do is to start picking out furnishings and make plans to move.   In simple terms  one party wants to buy and one party wants to sell, what could be simpler and why should it take so long for the formalities to be sorted?

The reality is that there is no set timetable when it comes to a conveyancing transaction and so things only progress as quickly as the slowest moving part of the chain.  At a time when banks are now looking closely at their lending criteria it can often be the case that a buyer may have to jump through more hoops that previously in order to satisfy their chosen lender.  Also, one person’s idea of urgent may not necessarily accord with another’s, and buyers and sellers can face dealing with people and or their representatives who may not share the same views on how quickly a transaction should proceed.

People have their own agendas and rightly so often decide to keep these very much under cover.  So even though on the surface he objectives are in common with each other there often exist complications which make it difficult for the conveyancer to push through things quickly.

If there is a sizeable chain of transactions then it is possible that one transaction can be ready to proceed fairly quickly, but is delayed whilst transactions elsewhere in the chain deal with complications.

Managing expectations and recognising that most conveyancing transactions will have complications or reasons for delay which are beyond the control of the conveyancer makes it advisable that buyers and sellers should not set their hearts on any specific dates for completion. 

There is no harm if parties wish to work towards target dates, but moving home is stressful enough without adding in the stress of trying to complete a transaction by a specific date, which may turn out to be non - achievable. 

Estate agents often raise expectations and set timetables which are unrealistic and for this reason it’s always advisable to speak to and rely only on the guidance given by your conveyancer.

Also keep in mind that the conveyancing process which has not changed since 1925 is antiquated and is not designed to promote a quick and efficient transaction.  On the contrary it often contributes to delay and makes it difficult and costly for the home owner to sell and or buy.  But that’s a different story! 

Morgan Jones and Pett are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877000 or via email at davidpett@m-j-p.co.uk