As the risk surrounding identity fraud and money laundering evolves, so too does the technology used to fight it. The introduction of a new industry benchmark from HM Land Registry has pulled ID verification into the 21st century.
This quick five-minute read will get you up to speed with this new Anti-Money Laundering touchstone, and the technology which has made it possible, detailing why its adoption can be of huge benefit for law firms and conveyancers dealing with AML.
What is the HM Land Registry Digital ID Standard?
In March 2021, HM Land Registry presented new guidance for a higher standard of identity verification within the industry.
This new benchmark encouraged the use of both biometric and cryptographic technology checks, which would offer a greater level of fraud prevention, as well as enhancing efficiency and convenience during client onboarding.
Upon conducting these checks, the conveyancer would have reached ‘Safe Harbour’ status for that case.
Why was it brought in?
“The current processes in conveyancing do not feel very 21st century and they have proved difficult to maintain in the current crisis. What can we do about it?”
Mike Harlow, Deputy Chief Executive and Director of Customer and Strategy
A Land Registry blog post from May 2020 raised concerns around fraud prevention and identity checking practices within the industry.
The article spoke of the “inconvenience and inconsistency” of outdated, manual verification methods which relied on the variable factor of human ability, compared to the more modern electronic passport checking methods.
Fuelled in part by the COVID pandemic, embracing these modern methods would not only greatly reduce the need for face-to-face meetings, but allow the conveyancer to complete checks in a more efficient, convenient way.
What is Safe Harbour?
If solicitors and conveyancers adopt and adhere to these new guidelines, either for residential or commercial transactions, HMLR will consider them to have “taken reasonable steps” to verify customer identities, and they would have reached Safe Harbour.
This means that HMLR would not seek recourse against the conveyancer should the identity of their client confirmed later in the process to be inaccurate.
How do you reach Safe Harbour status?
The three stages are:
- Obtaining evidence from the client
- Checking the validity of the evidence
- Matching the identity to the evidence
A fourth requirement is an additional check to be carried out by the conveyancer who represents a transferor, borrower, or lessor in the transaction.
What are the benefits to law firms?
Embracing this new yardstick of verification can provide an efficient, cost effective, and reliable approach to legally verifying if a person is genuine when buying or selling properties. Advances in technology such as NFC in smartphones speed up the process, whilst AI authenticity checks can spot fake documents with fast and reliable ease. With these advances bringing peace of mind to a once problematic area of conveyancing, it’s understandable why these guidelines are being adopted in many law practices.
Japanese knotweed is a rare but all-too-real challenge to the conveyancing process. And, as spring has now sprung and this problematic weed enters the fast-growing season, it’s worth conveyancing professionals’ time to ensure they’re up to date and fully informed about the latest guidance.
We’ve put together a five-minute read to help you keep the conveyancing process on track and prevent you and your customers from getting tangled up in Japanese knotweed confusion:
1. What is Japanese knotweed?
- Japanese knotweed is a fast-growing, invasive rhizome plant with deep, strong, and notoriously destructive roots
- It affects around 5% of UK properties
- It typically requires costly, specialist removal when detected
2. Why does it matter to the conveyancing process?
- Japanese knotweed is mentioned in the TA6 property information form that property sellers must complete
- The presence of Japanese knotweed on or near a property tends to cause panic, not only because it requires specialist removal, but also because homeowners can be fined if they fail to contain and safely dispose of it
- This can lead to additional queries in the conveyancing process, problems with mortgage applications and in many cases, a complete change of heart on the part of the buyer
3. What’s new in RICS and Law Society guidance?
- RICS has recently published new guidance which abolishes the 7-metre rule used by valuers to assess risk and which proposes a ‘more nuanced’ view of the problem
- As a result, valuers and surveyors are likely to advocate careful management, rather than complete eradication, of the weed
- Nevertheless, the TA6 form has been updated to require sellers to declare with absolute certainty whether Japanese knotweed is present or not – and in the case of a ‘no’ response, will be held liable on that basis
4. What does that mean for my customers?
- It’s incumbent on conveyancing professionals to ensure that their customers fully understand the TA6 update and their liability regarding their declaration on Japanese knotweed
- There are, however, specialist indemnity products available via our OneSearch order portal to mitigate future claims risk, such as CLS PI.
5. How can I learn more?
- We ran a webinar – Japanese Knotweed and its Impact on the Conveyancing Process, which can be viewed here