Australia: New Requirements to Identify Mortgagors in Queensland

Last Updated: 9 July 2006

New requirements to identify mortgagors commenced on 6 February 2006, leaving industry no time to implement new procedures.

The amendments to the Land Title Act (Qld) are intended to address the rising incidence of identity fraud in relation to mortgages.

Details of the amendments

The Torrens system has a concept of indefeasibility, meaning that the interest of a person who becomes registered is protected by statute. If an owner or mortgagee suffers loss as a result of fraud or defect in the register, the State will pay compensation (subject to conditions).

The amendments qualify indefeasibility in two ways:

  • indefeasibility will not be available unless the mortgagee has taken "reasonable steps" to identify the person(s) who sign the mortgage (irrespective of whether the mortgagee becomes mortgagee by a new mortgage or transfer of mortgage); and
  • if a mortgagee exercises power of sale under a mortgage which was executed fraudulently, the mortgagee may only retain out of the sale proceeds the aggregate of principal, reasonable enforcement costs, and interest, limited to the lesser of:
    1. the official cash rate, plus 2% (currently about 7.5% per annum); or
    2. the rate in the mortgage.

It appears mortgagees will not be entitled to break costs or other fees and charges such as deferred establishment fees. The interest rate is too low to protect the legitimate interests of many mortgagees. The limitation only applies when a mortgagee successfully sells under a mortgage that was executed fraudulently, and will not impact "ordinary" mortgagee sales.

Taking reasonable steps to identify the mortgagor

The Department of Natural Resources and Mines has issued a Land Title Practice Manual Update dated 1 February 2006 indicating what constitutes "reasonable steps" to identify the person(s) who signs the mortgage as mortgagor.

These guidelines do not prescribe the only ways of taking reasonable steps.

The procedures prescribed by the guidelines are as follows.

  1. If the mortgagee is a cash dealer under the Financial Transaction Reports Act (FTRA), the mortgagee may use either method under the FTRA to identify the signatory – ie, 100-point check or s21 identification reference.
    However, if the mortgagee has no obligation under the FTRA to identify the mortgagor (for example, where the intended mortgagor is not a signatory of an account), the mortgagee must adopt the guidelines under 1.2.
  2. Where the mortgagee is not a cash dealer under the FTRA, the mortgagee must use the 100-point identification check. The guidelines specifically state that a s21 identification reference is unacceptable.
    The prohibition on the s21 identification reference runs contrary to the overall theme that these guidelines do not prescribe the only way of taking reasonable steps. As the guidelines have rejected a system which is widely used and authorised by the FTRA, what else will constitute reasonable steps?
    Where the mortgagor is a company, execution must be by officers who appear on the ASIC register (ie, no change to current practice).
  3. There is no need to repeat the identity verification if the mortgage is executed within a reasonable time after the original identification.
  4. A mortgagee should make further checks and not rely on mere mechanical compliance with the 100 point check if there are matters of concern – eg, change of name, change of gender(!), age discrepancy.
  5. Where an existing customer takes out a further mortgage or varies an existing mortgage, it is not necessary to conduct another identification. However, the mortgagee must ensure that the person taking out the mortgage is the same person as the existing customer.
  6. On transfers of mortgages, the new mortgagee must verify the identity of the mortgagor again unless the original mortgagee provides copies of their identification documents or the record of the steps taken for the original verification.
  7. Where a mortgagor is unable to attend at the office of the mortgagee or its representative because the mortgagor is disabled or located in a remote location, the mortgagee can rely on a certificate from a justice of the peace "or other qualified witness" certifying that the mortgagor’s identity was verified by a 100-point check. It is unclear whether this arrangement is acceptable where the mortgagor is not disabled or remote.
  8. Where a mortgage is signed under power of attorney for an individual, the attorney must be identified. Where an attorney signs on behalf of a company, the execution of the power by the company must be verified.


The mortgagee must keep a record of the steps taken to identify the person signing the mortgage as mortgagor, for seven years after the mortgage is registered. The record must be:

  • a written record in the "approved form" being any form that properly identifies the mortgage transaction, and clearly details the steps taken by the mortgagee to identify the mortgagor; or
  • originals or copies of documents used by the mortgagee to identify the mortgagor.

Either before or after the registration of the mortgage the registrar may require a mortgagee to advise of the steps taken, or produce the documents used to identify the mortgagor. Failure to keep records or comply with the registrar’s request may result in a maximum fine of 20 penalty units (currently $1,500) per mortgage.


Cash dealers who routinely obtain 100 point checks will have little to change, except where there are signatories who are not account holders.

Other mortgagees need to develop new procedures to comply. The new requirements may involve significant change for these mortgagees. Gadens Lawyers can advise on appropriate arrangements.
By Jon Denovan



Jon Denovan

t (02) 9931 4927


Elise Ivory

t (02) 9931 4810




Danny Moore

t (03) 9617 8596


Peter Grotjan

t (03) 9617 8538




Ron Eames

t (07) 3231 1674


Lionel Hogg

t (07) 3231 1518


This publication is provided to clients and correspondents for their information on a complimentary basis. It represents a brief summary of the law applicable as at the date of publication and should not be relied on as a definitive or complete statement of the relevant laws.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

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”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
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).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.