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Navigating the New “Source of Funds” Standards in Reports on Title

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by

Simon Seaton
in

In the world of, the “Report on Title” has always been a cornerstone of client communication. However, a significant shift is occurring in how we report on one of the most sensitive areas of a transaction: Source of Funds (SoF).

The days of simply seeing a bank statement and ticking a box are over. Recent updates to industry guidance—including the 2025 Legal Sector Affinity Group (LSAG) updates and the SRA’s thematic reviews—have redefined what “good” looks like.

TopicSummary
Source of FundsHelpful explanation to client about various legal/statutory obligations relating to source of funds
Sending Balance of FundsDetailed advice to client about firm’s duty in relation to investigating source of funds (inc statutory obligations)
Source of Wealth/Funds for DepositWith Source of Funds and Source of Wealth being hot topics at the moment, various legal regulators have started to recommend that firms manage expectations when it comes to setting out clearly and unambiguously the practice’s obligations in this key area.
Gifted Deposits – warning to clientsParagraphs advising client of possible adverse implications (including risks to the donor) where there is a gifted deposit
Requirements in relation to Payment of the Purchase MoniesSets out assumptions and requirements in relation to payment of the purchase monies. At the same time the section also sets out implications of failure to comply with such requirements.