Precis:
The past year or so has left Western Australian property owners feeling uneasy, with two instances of properties being sold without the owners' knowledge or consent. The Western Australian Land Authority (Landgate) have introduced a new type of caveat to prevent both the registration of certain documents and fraudulent dealings with the property.
Background
In June 2010, fraudsters sold an owner's property in Karrinyup in Western Australia whilst the owner was living in Cape Town. On the owner's return to Perth, he found that the fraudsters were also attempting to sell another of his properties in Wembley Downs in Western Australia.
Earlier this year, a property in Ballajura in Western Australia, owned by a different couple, was sold without the owners' consent whilst they were living overseas. The owners only discovered the property had been sold on their return to Perth to inspect the property.
The fraudsters in both cases appear to be highly sophisticated and used disposable mobile phones and internet cafes, which made them difficult to trace.
In an attempt to combat these frauds, Landgate has introduced a new type of caveat to prevent the registration of any instruments that would normally require the owner's signature. This caveat, known as the improper dealings caveat (ID Caveat), prevents the registration of transfers, mortgages and leases.
The ID Caveat will hopefully prevent future scam artists from stealing the identity of absentee landlords, many of whom reside overseas.
Past fraudsters
Whilst the overwhelming majority of fraudulent dealings registered in respect of Torrens land are committed by people acquainted with the registered proprietor, fraudsters are now becoming increasingly sophisticated and will go to great lengths to convince real estate agents they are the owners of a property.
As a rule, real estate agents should be particularly cautious of:
- owners calling from overseas;
- owners refusing to have documents forwarded to their overseas address; and
- attempts to sell the property quickly as the owners allegedly need money for an 'upcoming investment opportunity'.
Additional enquiries should be made into the identity of such owners to ensure they are legitimate.
In response to the recent frauds, the Western Australian state government has recently made amendments to the Code of Conduct for Agents and Sale Representatives (Code) which now requires real estate agents and licensed settlement agents to act with greater diligence than the standard previously required.
Effective from 1 November 2012, real estate agents and licensed settlement agents under the Code are expected to:
- complete a 100 point identity check, sighting only original documents to verify the identity of the seller and are vigilant to ensure they are always dealing with the registered proprietor;
- refer to the certificate of title for the name of the registered proprietor of the property; and
- ensure procedures are in place to verify identities for sales, security documents and the general privacy of agents' clients.
Lodging an ID Caveat
It is recommended that owners who wish to prevent the risk of further fraudulent activity occurring to lodge an ID Caveat.
- An ID Caveat can only be lodged in the name of all of the owners of the property and can only be lodged or removed when all of the owners of the property want to lodge or remove it.
- A solicitor can sign and lodge the ID Caveat with Landgate on behalf of the owners, however must be instructed by all owners to act for them.
- A licensed settlement agent may not sign and lodge an ID Caveat on behalf of owners of a property.
- Should the owners wish to remove the ID Caveat they must all present themselves at Landgate's head office and complete the stringent 100-point identity check.
- An ID Caveat will not prevent certain rights, such as in the case of transmission and survivorship applications, sale by a sheriff under a Property (Seizure and Sale) Order or a mortgagee exercising a power of sale.
Practical tips for the prevention of fraudulent activity
- Notify your (trusted) neighbours if you are leaving the property unattended for an extended period and let them know if you have organised for the property to be maintained by gardeners, cleaners, friends etc.
- Keep your personal details, including your certificate of title if not retained by your mortgagee or bank, in a safe and difficult-to-access place to prevent identity theft.
- Lodge an ID Caveat with Landgate. The knowledge that your property is protected when your absence makes it impossible to monitor is worth the cost of a lodgement fee.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
