Steps to protect clients' funds in property deals

A string of safeguards has been proposed in Parliament to make it harder for conveyancing lawyers to make off with their clients' funds. If the safeguards are approved, lawyers will no longer be allowed to receive and hold conveyancing money, belonging to buyers and sellers of property, in their normal client accounts. They will instead have to open a new conveyancing account with an approved bank. The withdrawal of money from the accounts, regardless of the sum, will also generally require signatures from two parties - usually lawyers for the buyer and seller. If the buyers or sellers still do not wish to deposit the funds with the lawyers, they can engage the Singapore Academy of Law (SAL) to hold the conveyancing money on their behalf. These were among proposed changes to the Conveyancing Act introduced yesterday by Law Minister K. Shanmugam. It is targeted to be implemented in the third quarter of this year. The law currently does not bar lawyers from holding clients' conveyancing money. The most recent measure to strengthen safeguards was in 2007. It required two signatories for withdrawing amounts of more than $30,000 from the clients' accounts. Even then, lawyers from the same firm could sign for each other, while sole proprietors could partner up to sign each other's requests. The latest proposals aim to address the problem of rogue lawyers who flee with their clients' money. To support the proposed measures, the SAL will also launch an electronic system that will allow lawyers to initiate payouts from the conveyancing accounts, and for the other party to countersign digitally. This will save time by dispensing with the need for hard-copy signatures. It also allows banks to securely retrieve and process instructions. The lawyer countersigning a request for a payout will have the duty of requesting information and verifying payment details. To resolve possible countersigning disputes, the aggrieved party can apply to the Law Society, which will appoint an adjudicator from a panel of senior lawyers.
- The Straits Time, C4
- Also quoted in The Business Time, P1, “Govt moves to protect conveyancing money”.

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