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I am acting for the vendor in a real estate transaction. My client has directed me to pay the proceeds of the sale to another party. Do I have to verify the identity of that party?

Unless the vendor is acting for or representing the other party, there is no obligation to verify that party’s identity. However, prior to accepting the client’s instructions to pay the proceeds to another party, you should make reasonable inquiries about the purpose of the payment and the relationship between your client and the other party. You should not be disbursing trust funds to pay client obligations that are unrelated to the legal services being provided. Further, depending on the circumstances, these instructions may trigger your duty to periodically monitor the professional business relationship and assess the potential money laundering risk associated with the retainer.