Source of Wealth Checks – What are they and why are they necessary?

 

If you have not yet come across the term ‘source of wealth’ and are just embarking on your journey of purchasing a property then this is something you will become very familiar with soon.

The obligation to check the identity of clients and their source of funding for a property purchase is placed on all participants involved in the conveyancing process from estate agents, mortgage lenders and solicitors alike because conveyancing as a legal service has been identified as a high risk area. 

When making an offer, submitting a mortgage application and instructing a solicitor you should therefore be prepared to provide identification documents, complete a source of funding questionnaire and provide copy bank statements. Each party will have their own requirements and company guidelines to follow so whilst you may find some duplication, please do expect to undertake these checks for each party separately. 

These checks also extend to anyone who is gifting you funds towards a purchase, such as a family member. We ask that if this is relevant to your transaction that it is disclosed when obtaining a quotation from MJP or as soon as you become aware that a gift will be involved.

We as solicitors are not detectives but the law is very clear as to our obligation to conduct such checks to understand how the money you are using for your purchase has been accumulated. So whilst the checks may feel invasive please do understand that as your representative we are following the required procedure for your transaction and wish to ensure that all legal aspects are in order for you to be able to complete your purchase. We do know the checks may seem meddlesome but we are very much living in a world where identification and financial records are at the forefront of lawmakers minds so it is highly likely we will see such requirements spread out in other aspects of our lives in the near future as well so we do expect this to feel more normal in the coming years. In the meantime, we will assist with any questions you may have about this part of your transaction. 

To ensure the checks can be conducted swiftly we recommend clients collate photographic ID, current proof of address (such as your latest utility bill), 6 months of bank statements for all accounts held and any associated evidence such as payslips and dividend vouchers at the outset of their transaction so that they have these available when completing a source of wealth questionnaire and ready to give to their solicitor. 

To start your conveyancing journey today and discuss any source of wealth queries you may have please click on the Get Quote button at the top right corner of your screen now.

MJP Conveyancing are solicitors who provide legal advice and services to clients based in England and Wales and who can be contacted on 01603877067 or via email at davidp@mjpconveyancing.com