This is an old-fashioned industry with conveyancing having been around forever. Many firms practicing in this area are not, however, very modern. This situation has forced all firms to modernise, despite preferences. KYC/AML (Know Your Client / Anti Money Laundering) checks have become tedious over time. The Government forces Solicitors, Estate Agents and financial institutions to properly verify their clients’ identity and their source of funds/wealth.
It is fair to say that, the burden to keep on top of AML compliance for law firms and clients has developed and become increasingly more protracted and complex in recent times. The pandemic has not weakened this obligation. We receive regular guidance by our governing body reminding us to be very aware of the fact that more fraud can occur now by people taking advantage of the situation we are in.
Another example of this is that there has been much more internet fraud going on than before the pandemic. So, this requirement is just as, if not more critical than before. We have to be able to identify who our client is; ordinarily clients would pop to our office with their passport and proof of identity (dated within the last 3 months). Offshore clients will go to a Lawyer or Notary within that jurisdiction. However, we are in lockdown all around the globe, so we have had to change our practices. We are doing a lot more FaceTime, WhatsApp video, and Zoom calls.
We have adopted a risk-based process whereby we take into account who the client is, where they are based, and what information we have already or can find out about them online if applicable.
We have had to be a little more agile. It is a New World Order and people are adapting reasonably quickly.
Fortunately, the majority of clients appreciate that we are required to take steps to protect our Firm from being used to launder funds and also to then demonstrate such steps if called upon to do so. We let our clients know exactly which documents need to be collated and provided so that we can efficiently and swiftly satisfy the onboarding compliance requirements thereby allowing us to deal with the legal due diligence as quickly as possible.
Dealing with documents
Wet ink signatures are required for Deeds because this is undeniable proof that the document has been signed by that person. Now, people may not have access to a printer and even if they do, the most common questions are ‘what do I then do with the document?’ and ‘how do I get it to where it needs to be?’
The Land Registry still requires documents that have been physically signed and witnessed but will accept PDFs or photographs to be sent to their Solicitor for it to then be submitted to the Land Registry in a formal application. The main issue is the witness signature, not the signature of the client. Witnessing at the permitted safe distance, potentially with PPE equipment (at the very least gloves and masks) can happen.
Finding someone willing to be a witness (bearing in mind the witness cannot be a family member and must be over 18 years old) is not that easy. It is however not impossible and is being done.
Covid-19 contract clauses
There is Covid-19 guidance for buyers moving into new properties, which is that yes, the Government has ‘unlocked’ the housing market industry to an extent, but the reason that transactions might not happen will still be there.
‘Opening up’ the industries means a second wave may come moving us into a higher risk number on the Government COVID alert level chart. If all of a sudden, the infection rate goes up, there will be another lockdown, so the clauses need to be used still, contrary to what many believe is the case now we are being phased out of lockdown. It is very positive, of course, but the risks are still there for us in advising clients about whether they can meet completion dates, etc.
Buyers are more cautious because there is uncertainty around job security and earnings, so they are understandably hesitant to proceed on transactions. It is easy to plan to the end of the week and month, but people are thinking about the end of the year. The result is that we are flipping back to a ‘buyer’s market’. Consequently, sellers are accepting lower offers and in retaliation turning the pressure on and speed is crucial. Buyers may have the deal agreed, but are still as nervous and constantly wondering whether they are doing the right thing, could the price drop more, etc. so if something comes up in the legal paperwork i.e. alterations without consent, etc., they are not likely to take a view meaning the transaction will take longer.
We rely heavily on meeting clients and professional contacts in the property industry. However, it is believed that post-COVID, the Zoom World is here to stay.
We are by now used to it and may need to work this way for the rest of year depending on Government updates and by that time, we will have all been doing it for so long that it will be the new normal. Faceless phone calls are less common now. We want to meet one another, despite the circumstances. It is, in some ways, more enjoyable, and getting used to it is certainly conducive to a better end.