WorkflowReal Estate Law & Conveyancing

Conveyancing Source of Funds Checks

Source of funds conveyancing that follows each pound of a buyer’s deposit from salary, bonus or family gift to the client account, with the statement line cited at each hop.

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Follow one gifted deposit through each feature ↓

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The problem

The donor’s side of a gifted deposit is the part that gets skipped

A careful check on a gifted-deposit purchase means months of statements across several accounts, payslips to tick against salary credits, a gift letter, the donors’ identity and their own statements, then a file note. With dozens of purchases heading for exchange, the letter goes on the file, the parents’ statements get a glance, and nobody asks where their money came from.

The gaps then surface in the week of exchange: a savings statement that never arrived, a joint account holder who never signed the letter, money that landed in the donors’ account days before the gift. Exchange slips, the chain waits, and the buyer is asked for everything twice without knowing why.

Built forResidential conveyancersReporting officersConveyancing paralegalsHeads of residential

The Problem Today

A deposit is built from savings, a bonus and a family gift, and the firm must know where each pound began.

1 in 10: files in the regulator’s review had no source of funds work published
£400,000: the regulator’s example fine for funds left unscrutinized published

Read and ticked today

Statements
Payslips
Gift letter
Donor bank

The donors go unaskedNobody traces where the parents’ money came from
Gaps found at exchangeAn absent statement or unsigned letter stalls the chain

The Solution

Each statement readBuyer and donor accounts, each line classed and cited
Hops traced to completionSavings, bonus and gift followed into the client account
Gift letter set against the moneyThe donors’ own statements show what the letter leaves out
Reporting officer decidesA plain request goes to the buyer, a cited note to the officer

Built-in controls

Client account details held until the check clears
Client messages never mention a referral
Whoever prepares a file never signs it off

What You Get

The firm exchanges with a file note the reporting officer can follow line by line, gifts included.

40 min: of conveyancer time on a file, against about 3 hours by hand our estimate

A single request to the buyerJust the missing pieces, and the reason for each
Donors traced one step backMoney that landed just before a gift comes to light
A file note with line numbersEach figure points to the statement it came from

Source of funds conveyancing on one deposit, from checklist to hold

From the exchanges list to the officer’s hold, each feature takes one part of the check and names the role it serves.

01Deposit trace and exchanges
Each deposit drawn from its contributors down to the client account
How it works
- The left panel lists each purchase exchanging in the next 14 days, with days left and a risk badge
- Contributor cards sit at the top, each hop running down its own lane into the client account
- The summary reads £37,000 cleared, £60,000 flagged, 65 of 66 statements read
Senior conveyancerSees which of her 8 exchanges needs her first, and where in that deposit the trouble sits, before opening a single statement.
02Contributions and documents
A document list built from each declared contribution, donors included
How it works
- Savings, bonus and gift each get a column of the documents that prove them
- A sum bar checks £25,000 + £12,000 + £60,000 = £97,000 against the mortgage offer
- 14 of 18 in hand: three missing and one gift letter to re-sign
Conveyancing paralegalChases the four open documents for this buyer and her parents, instead of sending one long list to each client.
03Statement read and cited
Every statement line classed, and third-party money kept out of the deposit
How it works
- A coverage strip per account marks each month read, missing or flagged
- Each line is classed: salary, own transfer, gift, third party or unexplained
- £3,920 of a £5,000 third-party credit went on travel two days later, so the deposit holds none of it
Senior conveyancerNo more ticking salary credits against payslips across 65 statements, or arguing from memory that a holiday payment was spent.
04Payslip citation
Round sums cleared only against the payslip line that explains them
How it works
- Round sums of £5,000 and above are flagged for a document
- The £12,000.00 credit matches line 4: gross £20,690.00, net £12,000.00
- Clicking a citation shows the source passage with its line highlighted
- The month’s low of £1,576.00 shows the bonus is new money
Senior conveyancerCan point the reporting officer to the exact payslip line behind a round number, where a file note today holds an opinion.
05The unexplained hop
The gift traced one step back, into the donors’ own savings
How it works
- The donors’ statements are read too, six months of each account
- £60,000 arrived from a third party three days before the gift went out
- Before it, the savings held £8,640; their income is two pensions, £2,910 a month
Senior conveyancerAsks where the parents’ money came from before exchange, rather than filing the gift letter and hoping it is true.
06Gift letter checked
Each clause of the gift letter set against what the money shows
How it works
- The letter is read clause by clause beside the donors’ statements
- Three terms match, the source does not, and two need action
- Only one of the two joint account holders has signed
Senior conveyancerFinds that a letter saying savings and not a loan sits on a credit referenced as a bridge, before the deposit moves.
07Request to the buyer
One plain request to the buyer, screened for tipping off before sending
How it works
- Lists just the missing pieces, and each item carries the reason it is asked
- A tipping-off check confirms no mention of a referral, a report or a suspicion
- Written in plain words at reading age 11, and sent only once the conveyancer approves
Senior conveyancerThe buyer and her parents get one message in plain words and send the evidence once, and nothing in it tips them off.
08File note and decision
A cited file note and a hold the reporting officer records
How it works
- The referral arrives with a file note of 9 cited bullets
- Three options: clear to proceed, hold for more information, or report
- Sign-off is barred to whoever prepared the file
- A hold keeps client account details back and sets a review date
Money laundering reporting officerReads the one hop that worries the conveyancer, with the line it sits on, and decides without wading through a pile of statements.
09Who checked and approved
One record of each read, proposal, approval and decision on the matter
How it works
- Agent and human entries on a single timeline, each with its time and reason
- Filters for people, agents and decisions
- The record cannot be changed, and exports as one pack for a review
Head of residential propertyAnswers a file review from a single record that shows who read what, who approved the request and who decided the hold.

A bridge credit, a missing signature, a spent payment and a lost month

Four of the six findings on the file, each with the next step it set.

Money in just before the gift

£60,000 reached the parents’ savings from a third party three days before the gift, referenced BRIDGE 0610. The letter says savings and not a loan, so the buyer is asked and the matter goes to the reporting officer.

One signature on a joint account

The gift letter carries the mother’s signature only, but the savings are held jointly. Both parents are asked to sign, and the father’s identity and address join the request.

A third-party payment already spent

£5,000 from a third party came in referenced HOLIDAY, and £3,920 went on travel two days later. The balance then fell to £558.00, so the payment is set aside, outside the deposit.

One savings month never sent

17 of 18 months were read. The balances either side differ by exactly one £850 standing order, yet the firm’s rule still blocks clearance until that statement is in.

The conveyancer approves the request, and only the officer clears or holds

The agents prepare the check. Four roles read it, and each decides only what its duties allow.

Conveyancing paralegal

Sees: The checklist, the upload link and which documents are still out
Signs: Nothing: opens files, uploads and chases documents

Senior conveyancer

Sees: The trace, the gift letter check and the draft request
Signs: Approves each client request, confirms the risk rating and refers the matter

Money laundering reporting officer

Sees: The referral and the file note, each figure tied to its statement line
Signs: Signs off each high-risk matter and alone decides whether to report

Head of residential property

Sees: The settings, the thresholds and the firm-wide risk assessment
Signs: Approves changes to the settings, and signs off none of the team’s files

Around the deposit

More of the source of funds conveyancing file: donors, gaps and the hold

What the conveyancer and the reporting officer open beside the trace.

Line chart of the parents’ joint savings over six months, a single £60,000 peak shaded as 3 days before the gift — **The donors’ balance over six months**Flat near £8,640 for months, one jump of £60,000 three days before the gift, then straight back down once the gift leaves.

Parents’ joint savings statement read and cited: line 3 an unexplained £60,000 credit, line 4 the same sum paid out to the buyer — **The donors’ own statement**Line 3 is the credit from a third party; line 4 is the same £60,000 leaving for the buyer three days later.

Statement reader with one savings month marked not received, and its gap shown on the coverage strip — **A missing month stays a gap**The balances either side reconcile to one £850 standing order, and the month is still added to the request.

Referral to the reporting officer: the worry in one line, the 9-bullet file note, the trace and the gift letter check attached, and a note — **The referral, off the client’s file**What worries the conveyancer, with the file note, trace and letter check attached. The client does not see it.

Deposit trace after the hold: the client account hop marked held, with the mortgage offer line for the £97,000 deposit cited beside it — **Client account details held**The matter is on hold, so the details stay back and nothing has been paid in. Exchange is locked until the officer clears it.

Settings for statement periods, round-sum and third-party thresholds, gift rules and release of client account details — **The firm’s own thresholds**Round sums from £5,000, third-party credits from £1,000, and donor money that lands within 30 days of a gift traced further back.

Who does the reading

Agents read every statement and draft every note; a person decides to report

One agent per stage of the check, from the checklist to the file note.

Checklist agent

Lists the evidence each declared contribution needs, buyer and donors alike.

Never rules a source acceptable

Statement reader

Reads bank statements and payslips whatever their layout, from scans or downloads, citing each line.

Never changes a number

Trace agent

Links each hop from debit to credit, origin to client account, and checks the balance covers the deposit.

Never relies on a credit it has set aside

Donor checker

Reads each donor’s statements and tests the gift letter’s terms against them.

Never contacts a donor: it asks through the conveyancer

Risk rater

Proposes the matter’s risk factor by factor against the firm-wide risk assessment, each with its reason.

Never sets the final rating: a person confirms it

Request and file note agent

Drafts one plain request for the missing pieces, and the reporting officer’s file note, citing the line behind each figure.

Sends nothing itself
Never mentions a referral or a suspicion to the client

Gifted deposits, donors and referrals: the questions that come up

What is source of funds conveyancing?

Source of funds conveyancing is the check that the firm understands where each pound of a buyer’s deposit began before it enters the client account. This solution reads the statements and payslips, traces each contribution hop by hop to completion, reads the donors’ own statements, and drafts the request and the file note. People approve and decide.

Can a gifted deposit be used, and what does the firm need from the donors?

Yes, with evidence. The checklist asks for a gift letter signed by each account holder, each donor’s identity and address, the donors’ own statements, and confirmation that the lender knows. The donor checker then sets each clause of the letter against the donors’ money.

Why does the conveyancer need months of bank statements?

To see that the deposit was built from income the buyer can show, month by month. The firm sets the periods: six months as standard, a longer run when savings are relied on, and six months for each donor. A missing month stays a gap, even when the balances either side agree.

What happens when money lands in a donor’s account just before the gift?

The trace goes one step further back. On its statement line, the donor checker shows the credit, the balance before it and the donors’ income, and marks the hop unexplained. From there the conveyancer asks the buyer for evidence and refers the matter to the reporting officer.

Will the client ever see that the matter was referred?

No. The referral sits in a separate file, and each client message passes a tipping-off check for any mention of a referral, a report or a suspicion before the conveyancer can approve it.

Who decides whether to report?

Only the money laundering reporting officer, and not on a file the officer prepared. The agents draft the file note and propose the risk rating; the conveyancer confirms the rating, and the officer clears, holds or reports.

Real Estate Law & Conveyancing