A standard conveyancing principle is that the practitioner should know their client and can readily identify them by following standard conveyancing practice and procedure.
This will normally not be an issue where the client is engaged in the sale of a property that they own and is their main residence; and the related purchase of a new property for the replacement of their main residence. This is normally achieved by the client providing photograph ID in the form of a valid passport or photo driving licence and corresponding ID to connect them to the sale property they own and are engaged in the process of selling. The forms of ID are normally current council tax bills and/or utility bills and other official letters from other bodies or organisations that connect the client to the property they seek to sell.
Difficulties may arise where the seller is selling a property they own but it is not their main residence and it is occupied by other parties, which can include tenants. This difficulty can be overcome by the seller making provision for utility companies and/or the local authority to prepare correspondence with the name of the client and the property address that relates to the sale property.
Further difficulties may arise if the seller is selling a property which is not their main residence and has no legal charge registered against it as this type of property transaction is susceptible to fraud. Knowing your client is of fundamental importance to practitioners whether they act for the seller or the purchaser in conveyancing transactions, since the Law Society Code for Completion by Post creates obligations on both the solicitor acting for the seller and the solicitor acting for the purchaser. The cases of P&P Property Limited v Owen White & Catlin LLP and Dreamvar (UK) Limited v Mishcon de Reya (a Firm)  EWCA Civ 1082 highlights such issues.
These cases (which were conjoined) led to a change in the Code for Completion by Post by the Law Society and has had the effect of reminding conveyancers of the fundamental importance of establishing the identity of clients/sellers in conveyancing transactions. This is because, on completion the seller’s solicitor undertakes that they have the seller’s authority to receive the purchase monies and that the seller is the true owner of the title to the property in the contract, and, having deduced the title to the property that person can convey the title that the contract states will be conferred.
The Dreamvar case raised disquiet and alarm in residential conveyancing as at the point of first instance it was held that the buyer’s solicitor, who had paid over completion monies to the seller’s solicitor, to a fraudulent seller, was liable in part due to the losses sustained by the buyer, even though the buyers solicitor was held not negligent, but in breach of trust. The subsequent appeal hearing held that some responsibility must fall on the seller’s solicitor to ensure that the seller who purportedly holds themselves out as the registered owner of the property, has been satisfactorily identified as such and was entitled to convey the property.
Whilst establishing the identity of the client/seller has always been of importance, both cases had the effect of making practitioners reconsider how they go through the process of establishing the identity of their clients; and better understand their obligations to the purchaser’s solicitors through the Code for Completion.