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 all parties involved in a real estate contract are who they claim to be.

Know your responsibilities

As a property agent, you must take reasonable steps to check the true ownership of a property―that the vendor is who they claim to be, and that they have the authority to sell the property.

You must also find out or verify any other facts about the property, including those told to you by the vendor to ensure you don’t misrepresent the property. This may include:

• zoning or development approval claims
• the size of the property
• general facts about the property (e.g. whether or not rooms built in underneath a house are of legal height and therefore able to be called  bedrooms, rumpus rooms or similar)
• the location of the property (e.g. whether it is in a school catchment)
• any other relevant facts about the property that a careful agent would check.

You are breaking the law if you ignore these responsibilities.

Recognise common scams

As a property agent, you may be the target of scammers.

A scammer may pose as the owner of a rental property and ask you 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.

Spot the warning signs

It is important to know what to look for, to help detect and prevent identity fraud. Warning signs include:

• A recent change in address or other contact details, which have not been provided until instructions to sell the property are received.
• A transaction that involves people located overseas (including witnesses on the documentation), or documents issued overseas.
• A request for funds to be sent to a different bank account to that normally used by the client (this may include offshore accounts).
• Advice the sale is or has become urgent that can’t be proven (e.g. due to matters such as an overseas investment opportunity or family illness).
• A new generic email address being used (e.g. Hotmail, Yahoo or Gmail).

Manage the risks

You can minimise the risks for yourself and your clients by:

• verifying property ownership
• keeping accurate records
• referring to your records to confirm key details (such as matching signatures).