Check a person’s identity before a property transaction
You have a responsibility to check the true ownership of a property before:
- listing it for sale, lease or exchange
- conducting an auction.
Identity fraud has become a significant risk for property agents, as scammers attempt to pose as the true owners of a property. In some cases, properties have been sold without the knowledge of the true owners.
Always make sure that a party to a real estate contact is who they claim to be.
Know your responsibilities
As a property agent, you have a responsibility to check the true ownership of a property. To ensure you do not misrepresent the property, verify anything told you to by the vendor, including:
- zoning or development approval claims
- the size of the property
- whether the ceiling height is legal.
You are breaking the law if you ignore these responsibilities.
Therefore, you must take reasonable steps to find out if:
- a person is who they claim to be
- they have the authority to sell or manage a property.
Recognise common scams
As a property agent, you may be the target of scammers.
A common situation involves a scammer:
- posing as the true owner of a rental property
- asking to update their contact and banking details.
These types of scams have become increasingly common. Sometimes, the true owner of the property may not realise the problem for many months.
If they succeed, the scammer can:
- receive money as if they are the true owner of the property
- make decisions about selling and letting the property.
Spot the warning signs
A combination of the following signs may suggest an attempt at real estate fraud.
New contact details
- A person gives you a new address or contact details ‘on behalf’ of a client.
- The details in new information are not consistent with what’s in your records.
- A new email address using a generic platform such as Hotmail, Yahoo or Gmail.
- Your client asks that you send funds to a different bank account from the one they normally use.
- They send you documents from overseas, or from unusual or disreputable places.
- Your client starts to use unusually poor language in their communication.
Unexpected sale requests
- Your client suddenly asks for an urgent sale.
- They give you a vague explanation, such as an opportunity to invest overseas.
- They offer you future work or other incentives to make a quick sale.
Manage the risks
You can minimise the risks for yourself and your clients by:
- keeping accurate records
- referring to your records to confirm key details (such as matching signatures).
To make sure of a client’s identity, we recommend that you:
- conduct a 100-point identity check using multiple points of identification
- keep a register of all clients’ original signatures and always check that a client’s signature is a match to the signature on file
- keep records of any strange, unique or particular discussions you have with a client
- always try to complete a property sale in person (if possible).