Obtaining documentary proof of the source of funds is one of the anti-money laundering (AML) practices put in place by banks to reduce the risk of money laundering and or the funds being proceeds derived from criminal activity such as corruption, drug trafficking, and misappropriation of public funds.
The bottom line is that you need to feel secure knowing that your personal data is safe. Your personal information is in good hands if you are working with a real estate lawyer who takes the privacy and security of their clients seriously.
The signed and stamped Agreement for Sale is typically given to banks in real estate sale and purchase transactions to satisfy this requirement. Whether you are the seller or the buyer, you likely have a lot of personal information on the line when you enter into a contract and, it is crucial that this data is kept secure and protected.
Therefore, it is important for real estate lawyers to keep the client’s interests in mind and to be proactive in protecting their personal information while also ensuring that their banker’s AML regulations are met. This means that the lawyer should take every measure to protect your data and ensure it is only used for the purposes outlined in your contract and within the confines of the law. According to Section 30 of the Data Protection Act of 2019, processing personal data is lawful when:
- the data subject consents to the processing for one or more specified purposes;
- the processing is required to carry out a contract to which the data subject is a party or in order to take steps at the request of the data subject before entering into a contract; or
- it is necessary for compliance with any legal obligation to which the controller is subject.
The bottom line is that you need to feel secure knowing that your personal data is safe. Your personal information is in good hands if you are working with a real estate lawyer who takes the privacy and security of their clients seriously.
Having stated the above, the following suggestions are made for a real estate lawyer to follow in order to safeguard a client’s personal data when their bank requests evidence of funds:
- Request a written authorization from the client for the transfer of information: The lawyer may have the client authorize in writing the release of information to the bank. This makes sure that the client has control over what information is disclosed and that only the information that is necessary is disclosed.
- Redact sensitive information: Before giving the proof of funds document to the bank, the lawyer may remove any sensitive personal information that is unrelated to the transaction.
- Consider using a third party verification service: If possible, the lawyer could use a third party verification service to confirm the client’s financial situation while still giving the bank the information they require, rather than giving the bank access to the client’s personal information.
- Talk to the bank: The lawyer can also attempt to work with the bank to determine any specific information that is required and come up with a means to deliver it without revealing sensitive personal data.
Read more on How to Implement the Data Protection Act 2019 in Real Estate Contracts inside the latest issue of the CMPD Magazine https://cmpropertydigest.com/product/cm-property-digest-november-2022-issue/
