16/09/2010 - 00:00

REIWA calls for more security

16/09/2010 - 00:00

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THE Real Estate Institute of Western Australia has called for more secure home sales documentation methods to be overseen by the state government after a Karrinyup investment property was sold without the absentee owner’s knowledge or consent.

REIWA calls for more security

THE Real Estate Institute of Western Australia has called for more secure home sales documentation methods to be overseen by the state government after a Karrinyup investment property was sold without the absentee owner’s knowledge or consent.

WA Police’s major fraud squad is investigating the alleged scam, where retiree Roger Mildenhall's $485,000 dollar Karrinyup property was sold in June while he was out of the country.

REIWA chief executive Anne Arnold said although the fraudulent sale of the property was highly unusual, a number of people and organisations, including the real estate agency, the settlement agent and Landgate, which registered the title to the new owner, had been tricked.

“It’s a bit of a perfect storm, these people have really worked out all the points along the process and have fooled everybody along the line, and it’s all slightly bizarre,” Mrs Arnold told WA Business News.

“What we thought when we were told about it was ‘how on earth did it settle?’

“You could imagine someone having a scam in the case of an absentee owner, managing to impersonate the owner and real estate agent and get the listing sorted and getting the property on the market, but when you settle, you have to provide a title to the settlement agent.

“That has to go to the titles office and be destroyed, and a new one is issued in the name of the new owner.

“That’s the point in the process that we don’t understand what’s happened.”

Mrs Arnold said that because the fraudulent party was able to either forge a certificate of title or trick Landgate into issuing a new certificate, there needed to be some examination of security protocols across title documents.

“Basically it’s a dealable document, if you have the title to a property, you can give it to someone else and take some money, and the deal is done, you don’t need a settlement,” she said.

“Maybe we need to start thinking about whether we need a microchip in these things which would make forgery more difficult.”

Mrs Arnold said tighter security and identity checks would become even more necessary, as offshore sales and overseas transactions become more commonplace in the market.

“As we get more and more of these remote transactions its perhaps something we’re going to have to think about a bit more in the future,” she said.

“My agents tell me that they quite often receive instructions from overseas or interstate from people, and they produce evidence that they own the property, and the agent is obliged under the act to search for title.

“But it really does raise some questions now about whether there is more checking that would have to take place. And our dilemma is, in the case that’s happened to this poor fellow in Floreat, with a house in Karrinyup that’s been sold out from under him, we wonder whether, even if you’d asked these people to produce proof of identity, where they could forge a title, presumably they could also forge a Western Australian drivers license or an Australian passport that would pass muster in a scan attached to an email.”

For Mr Mildenhall, Mrs Arnold said that REIWA had been advised that as the transfer of title had occurred, the new owners were the proprietors of the land.

She said Mr Mildenhall’s recourse was to pursue legal action under section 201 of the Transfer of Land Act, which entitles compensation paid to any person deprived of land in the case of fraud by the state government.

“There is a section in the transfer in land act that talks about people who are divested in their property by a fraud being able to sue the registrar, essentially,” she said.

“They’re not to blame, but there is a fund, and the government under that act is able to compensate the owner for the error.”

 

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