National E-Conveyancing (NECs) is progressing
towards reality, although implementation is still a few years away.
NECS is a national system under which lodgement of land dealings
occurs electronically (like the PPS regime). Lenders are requested
to give us feedback on these proposals ASAP to allow feedback to
the working party.
Example: An individual authorises its lender or lawyer to
register a transfer or mortgage. This comprises two steps:
the lender/lawyer identifying the individual –
this is called 'client identity verification' –
the individual authorising the lender/lawyer to create the
dealing (eg mortgage or transfer) on the land titles
To reduce the risk of fraudulent dealings being lodged on the
register, proper identification of individuals wanting to deal with
their land is of critical importance. However, the necessity for
face to face meetings to make the identification has the potential
to create a bias against brokers and lenders without large branch
networks. Even customers of banks with large branch networks may be
inconvenienced by the need to visit a branch in person for
National E-Conveyancing Development Ltd (NECDL – the
company set up to establish and run NECS) recently issued a
stakeholder consultation proposal for identity verification. The
proposal contemplates that all of the following three steps will be
required to identify an individual:
Identity documents production – production of
specified documents (eg drivers licence), some of them with a
picture of the applicant;
Visual identity verification – face to face matching
of the person's facial features to the photograph(s) included
on one or more of the identity documents;
Electronic document verification – electronic matching
of the details contained on some of the identity documents with the
issuing agencies' records through the Commonwealth
Government's Document Verification Service (DVS).
As noted above, the requirement for face to face verification
poses an issue for lenders and brokers without a big branch
network, and even poses challenges for those with many
There has been some suggestion that brokers could be allowed to
effect the face to face verification for lenders (in the same way
as many brokers conduct AML/CTF identification for lenders).
However, the proposal contains the major proviso that these lenders
accept liability for the conducts of brokers.
The basis for this suggestion is as follows:
brokers are now licensed;
brokers have PI cover;
lenders will be required to ensure that brokers receive
adequate training on verification;
lenders must carry out regular quality assurance checks.
Another option being considered is to allow Australia Post to
verify identity for lenders. Australia Post liability would be
covered by NECDL and not the lenders.
Lenders who outsource document preparation would be able to
'pass' the benefit of the identification by brokers or
Australian Post to document preparation houses (eg panel
NECDL has asked us to obtain feedback on these proposals. If you
are a lender would you be prepared to underwrite the performance of
brokers? Is Australia Post a workable solution? If you are a
lender or servicer, we would appreciate your feedback promptly
which will then be compiled and submitted to NECDL.
The Council announced planning policies to encourage more inner suburban retirement village and aged care development.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).