Yesterday on EYE, Rob Hailstone of Bold Legal Group posted that he had drawn up a list of ‘red flags’ for solicitors and agents to be aware of.
This was in the context of our report on two cases of identity fraud where two different buyers had been duped out of their money by fake vendors.
Both deals had gone through the normal channels – ie, estate agents and solicitors – and ended up as cases at the Court of Appeal. In one case, the agent was being sued by the buyer, albeit unsuccessfully.
Hailstone tells us that a number of readers requested the ‘red flag’ list. However, if you were one of those, you may not have seen the final tweaked list which was issued last night. One of the additions to the list was suggested by an EYE reader, resulting in a new warning over properties being put up for sale at inexplicably low value.
Here is the list of potentially dodgy sellers, compiled by Bold in conjunction with its members and also the Society of Licensed Conveyancers:
RED FLAG – RISK GROUPING
- BUSINESS SOURCE
- Unusual introducer
- Direct approach where reason for contact questionable
- Proximity of the party to their conveyancer – if there is a distance, why?
- SELLER CHARACTERISTICS
- Absent owner or landlord
- Owner/seller living abroad
- Recently issued (new) ID documents/driving licence etc
- Seller’s lack of knowledge about the property
- Where the seller lives at a different address from the property and has no documentary evidence such as bills or buildings insurance schedule linking seller to the property
- Proximity of a signatory to the witness – if there is a distance, why? What is the relationship between the signatory and the witness?
- Email contact (remote client)
- Sole proprietor
- Long-time owners (high equity)
- PROPERTY CHARACTERISTICS
- Unencumbered (no mortgage)
- High value
- Where there is no restriction on the register to comply with
- Low value without a good/plausible and verified reason
- OTHER CHARACTERISTICS
- Quick sale required
- Quick, back to back sale (increased price)
- Funds going abroad or to an unusual destination
- End of chain transaction
The above list is not meant to be 100% exhaustive but merely a guidance as to what issues or circumstances, taken alone or together, could point towards a fraudulent transaction taking place.