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.
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
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
owners calling from overseas;
owners refusing to have documents forwarded to their overseas
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'
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.
Landgate has advised of the following restrictions and
procedures applicable to the lodging of 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.
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