Property sales should be better policed in the wake of a scam that resulted in Perth man Roger Mildenhall having a property sold without his knowledge, the Real Estate Institute of Western Australia has admitted.
Mr Mildenhall was living in Cape Town when his Deanmore Road duplex in Karrinyup was sold without his knowledge for $485,000 in June by Nigerian-based scammers purporting to be him.
The scammers then tried selling his Hale Road home in Wembley Downs, which was full of his furniture and two cars, but were foiled when a neighbour alerted Mr Mildenhall to the sale.
REIWA chief executive, Anne Arnold, has called for more secure documentation methods, particularly over land title transfers, to be overseen by the state government.
"The Certificate of Title is a tradable commodity, just like cash, so it's probably time for Landgate to look at more sophisticated security measures on the actual document, such as a microchip as we have on our passports," Mrs Arnold said.
"This scam was very slick, but the key point at which it could have been detected was during the settlement process.
"The fact that the scammers were able to either forge a Certificate of Title or trick Landgate into issuing a new certificate of title, means we really need to look at much greater levels of security around the actual document itself.
"Under the Act, agents are required to search the title at the time of listing a property, but the bona fides of the seller are not required to be checked. In most cases agents are dealing with clients that they know so it's not an issue."
She said it was her understanding that once the Certificate of Title has been registered by Landgate, the transaction was complete and the property has changed hands, so it was unlikely that Mr Mildenhall would be able to recover the property.
Mrs Arnold said REIWA would be working closely with the Real Estate and Business Agents Supervisory Board to review current protocols, but doubted that identity checks on sellers would have prevented this particular case from occurring.
She said that agents were finding that an increasing number of properties were being sold online and on instructions to agents via emails, faxes and phone calls, with little or no face-to-face interaction with sellers.
"While these methods are very convenient for interstate and overseas buyers and sellers, it is now more important that everyone involved in the transaction takes steps to authenticate the process and, in particular, the seller's ownership of the property", Mrs Arnold said.
"This has been a 'perfect storm' of events by a very sophisticated outfit which seemed to have a great deal of knowledge about this owner, his property, his overseas movements, and the legal process in WA for selling homes."
Commissioner for Consumer Protection Anne Driscoll agreed that the processes should be reviewed thoroughly.
"It is important that every phase of the sale and transfer process that was undertaken in this instance is reviewed, to ascertain what went wrong," she said.
"This no doubt this will give some clarity about what should/could have been done to prevent it.
"In the interim the two regulatory Boards responsible for the real estate and settlement industries have issued email warning to all licensees in WA asking that they be particularly vigilant to confirm the identity of owners of property and that any signatures on legal documents are verified before proceeding with a real estate transaction.
"Separate to this issue work is being done to develop standards for proposed electronic conveyancing systems. A key area of work is to establish a robust Client Identify Verification Standard."