As a way to reduce the risk of land title fraud and other land title irregularities, the NSW Government has introduced reforms for a new Verification Of Identity (VOI) policy.
From 1 August 2016 we have been required under new conveyancing rules set out in section 12E of the Real Property Act 1900) to verify the identity of any person/party to a conveyancing transaction (Conveyancing Rules).
Under Rule 4.1.2:
“A representative must take reasonable steps to verify the identity of:
- Clients: each Client or each of their Client Agents; and
- persons to whom certificates of title are provided:
- Any Client or Client Agent, prior to a Representative giving a certificate of title to that Client or Client Agent; and
- Where a Representative acts for a mortgagee, any existing Mortgagor, former mortgagor or their agent, prior to the Representative giving a certificate of title to that existing mortgagor, former mortgagor or their agent.”
These Conveyancing Rules relate to, amongst other things, the requirements for lawyers and conveyancers to verify the identity of their clients and to check that these clients have the required authority to deal with the land.
The Conveyancing Rules apply to all conveyancing transactions, the purpose of which is:
- To create, transfer, dispose of, mortgage, charge, lease or deal with in any other way an estate or interest in land;
- To register, note or record anything on the title to a property; or
- To get the registration, note or record of something on title changed, withdrawn or removed.
To understand the far reaching implications of the Conveyancing Rules, this means that any party looking to register a transfer of sale or lease, a formal Lease, a variation or surrender of a lease, or an easement would have to have their identity verified. The Conveyancing Rules also extend to people entering contracts for sale of land and agreements for lease.
The Conveyancing Rules also apply to the delivery of Certificates of Title to clients and mortgagors.
For the purposes of complying with the Conveyancing Rules, we can either apply the VOI Standard or “verify the identity of a person in some other way that constitutes the taking of reasonable steps”.
The VOI Standard requires a face-to-face interview and also production of at least two original and current identification documents (depending on the nature of those documents). The person conducting the interview must be satisfied that the documents provided are authentic and belong to you.
We provide our clients with three (3) options in order to verify their identity:
- Attendance at our office;
- Attendance at a participating Australia Post branch;
- Attendance at their home or office by a private identity agent company (we use a company called ZipID) who will then provide a secure ID verification report to provide to us.
It is also important to note that we as legal practitioners are required to keep a copy of the VOI for seven (7) years as a document supporting the dealing.
Once an identity has been verified, it does not need to be re-verified for two (2) years.
The aim of the VOI reforms is to strengthen the security and integrity of the land title system in Australia. It is also a key first step in the transition to electronic conveyancing where property transactions can be settled through the electronic platform provide by Property Exchange Australia Limited (PEXA)….but more on that in a future blog post!