Land Registry’s proposed Safe Harbour scheme
Some aspects of the conveyancing process can seem archaic, but the Land Registry has suggested a way to revolutionise one aspect – identity checks.
Prior to COVID-19, we routinely invited clients into the office at the outset of the transaction to provide their IDs. More recently, we have had to find digital solutions.
The Land Registry has run a consultation as there is widespread demand for better and safer ID checks. The consultation ended on 11 December 2020. It is hoped that, if rolled out, the changes could be in place this year.
The Land Registry has proposed a series of requirements which, when met, places the conveyancer in the Land Registry’s Safe Harbour (the “Safe Harbour Standard”).
Currently, if a fraudulent transaction is carried out, the Land Registry may compensate the person who suffered a loss (i.e. a homeowner who had their property fraudulently sold by someone else). The Land Registry can then recoup, in certain circumstances, the loss from the conveyancer.
A conveyancer who has therefore carried out their ID checks but has been duped by an expert fraudster is at risk of having to pay huge sums in compensation. However, under the proposed changes, once the conveyancer has satisfied the Land Registry’s new requirements, they are in the Safe Harbour – this means the Land Registry would not pursue any claim against the conveyancer on the ground the identity checks were inadequate.
The checks are three requirements for all transactions and an additional fourth for when the conveyancer is representing a transferor, lessor or borrower (generally a sale or remortgage):
- Obtain evidence. The evidence must include an item which can be checked by interrogating cryptographic security features within that evidence.
- Check the evidence. It must be genuine which can be checked by using an identity check provider to verify the documentary and cryptographic security features.
- Match the evidence to the identity. It must match the person presenting the document and an identity check provider needs to carry out a “liveness check”.
- Obtain evidence to ensure the client is the same as the owner. You must connect the client to the property.
Subject to meeting the above, the conveyancer can be confident they have carried out the required due diligence and are safe from being pursued for compensation by the Land Registry for identity fraud.
This gesture from the Land Registry shows a level of confidence in their digital ID checks. Arguably, the Land Registry is pushing to become more digital. Recently, the Land Registry amended their requirements to accept some digital signatures too. In this unprecedented time, the Safe Harbour adds a level of protection from fraudsters and the Land Registry’s moves towards further digitalisation allow for further flexibility.
It’s worth noting the Safe Harbour is not compulsory (nor will all legitimate clients have the required documents to allow their conveyancer to use it). It does, however, offer a benefit to those who adopt it and helps push conveyancing into a digital era, should it be implemented.
We’re here to helpEmail Héloïse
Héloïse deals with a wide range of property matters, particularly in relation to sales and purchases. The varied range of clients she works with include businesses and individuals, both locally and nationally.