Proving your source of funds for the purchase of a property is extremely important in the conveyancing process, without which, a purchase cannot proceed. There are large sums of money changing hands in the conveyancing sector making this an area of law heavily attacked by fraudsters.
Procedures have now been put into place by solicitors to determine where all funds have come from, regardless of the amount of time funds have been sat in an account. A solicitor would still require you to prove where the funds came from and how it got there this would also apply to a deposit that has been gifted.
Example – If £30,000 had been sitting in a deposit account for a year, a solicitor would need evidence how these funds got there. Some examples of this could be from earnings, an inheritance or a retirement fund etc. If a 3rd party had deposited this into the account a solicitor would also request evidence of how the 3rd party obtained these funds.
A solicitor cannot by law proceed with your purchase without knowing the source of your funds. This is to limit the potential for fraud, protecting the solicitor, the legal sector and most importantly, the buyer.
We would always advise our clients to co-operate with solicitors in these cases to make the process run as smoothly as possible.
Article Credit: IFA Conveyancing