One of the first requests a solicitor firm will ask of you when you are purchasing a property is to exhibit source of funds. This applies to both cash buyers and those with help from a mortgage (as the solicitor will require to see where the source of the deposit fund has originated from). In order to comply with anti-money laundering regulations, solicitors must carry out obligatory checks to establish the source of funds being used.
Providing the necessary documentation is a fundamental part of the conveyancing process. If sufficient proof of funds cannot be given, then it is likely that the transaction cannot proceed. Deposits or cash purchases on a property require the conveyancer to deal with considerable amounts of money, meaning law firms are a prime target for criminal activity and fraudsters to attempt to launder cash through firms. There is no set protocol that all law firms must follow; thus, it is the appointed solicitor’s responsibility and due diligence to ensure that the funds are from a legitimate source.
Source of wealth describes how a client, or their family, has acquired their total wealth. For example, the critical focus for the solicitor is to understand what has generated or contributed to the accumulation of a client’s financial status or other assets.
When asked to provide a source of funds, the onus is on the buyer to provide documented proof of how the money came to be in their possession. Depending on individual circumstances, clients may need to provide some or all of the following:
If you have a query or wish for some advice please make an enquiry or contact one of our offices directly and a member of our team will be happy to assist.