Remote communication and fraud risks in real estate
In the context of COVID-19, lawyers are often unable to meet in person with their clients. The Law Society of Ontario has temporarily authorized remote verification of client identity and permitted remote commissioning of documents. This information can be found in this FAQ.
Remote meetings and remote signing introduce additional fraud risks. Lawyers need to be extra vigilant in client ID and client verification efforts. Where possible, request a high resolution electronic copy of the front and back of your client’s Canadian government-issued photo identification. When you videoconference with your client, make sure to confirm that their identity matches their ID. Use the practicePRO Video Conferencing Checklist to help manage your client meeting and reduce risk.
Some of the key red flags of fraud to watch for are:
i) Rush closing and new clients, whether individual or corporate;
ii) Requests to send funds to unrelated third parties;
iii) Changing payment instructions just before closing;
iv) Transactions on mortgage-free properties or vacant land; and
v) Transactions involving people who are elderly, vulnerable, or out of country. Consider whether there may be undue influence or pressure from family members or other acquaintances.
The LAWPRO Fraud Fact Sheet: Real Estate provides additional information on fraud risk.