From 1 May 2016, NSW has new identity verification rules
in real estate transactions.
The NSW Land and Property Information (LPI) has introduced new
Conveyancing Rules under section 12E of the Real Property Act which
take effect from 1 May 2016.
The new Conveyancing Rules relate, amongst other things, to the
requirements for lawyers and conveyancers to verify the identity of
their clients and to check that they have authority to deal with
What is the new rule about verifying
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."
How do you verify my identity?
For the purposes of complying with the new conveyancing rules, a
legal representative can either:
apply the Verification of Identity Standard; or
verify the identity of a person in some other way that
constitutes the taking of reasonable steps.
Generally, the Verification of Identity Standard can be applied
by a legal representative, its identity agent, or by both in
The Verification of Identity Standard requires a face-to-face
interview and production of at least two original identification
documents (depending on the nature of those documents).
In the case of a company, the Verification of Identity Standard
requires a legal representative to:
confirm the existence and identity of the body corporate by
conducting a search of ASIC's records; and
take reasonable steps to establish who is authorised to sign or
witness the affixing of the seal on behalf of the body corporate;
verify the identity of the individual or individuals signing or
witnessing the affixing of the seal on behalf of the body corporate
as one would for execution by an individual.
In the case of execution by an attorney, the legal
representative must also take reasonable steps to establish that
the conveyancing transaction is authorised by the power of
A legal representative may engage an "identity agent"
to undertake the verification of identity process on its
But you already know who I am!
Yes! However, the new conveyancing rules require that this
verification of identity process is undertaken. While the LPI does
not yet require that certification that the verification of
identity process has been undertaken in order to register dealings,
we expect that this will follow as it is a requirement in other
States. In the meantime, legal representatives are required to keep
a copy of the verification of identity for seven years as a
document supporting the dealing. The information will be retained
The good news is that once your identity has been verified, it
need not be re-verified for a further two years.
What is the rule about authority to deal?
Rules 4.3.2 and 4.3.3 say:
"For each Conveyancing
Transaction a Representative must take reasonable steps to verify
that its Client is a legal person and has the right to enter into
the Conveyancing Transaction.
A mortgagee, or a Representative of a
mortgagee, must, for each mortgage, variation of mortgage or
transfer of mortgage, take reasonable steps to verify that the
mortgagor is a legal person and has the right to enter into the
A conveyancing transaction is one which involves one or more
parties and 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, or
to get something registered, noted or recorded in the titles
to get the registration, note or record of something in the
titles register changed, withdrawn or removed.
The legal representative's obligation to take reasonable
steps to verify that its client is a legal person and has the right
to enter into the conveyancing transaction is in addition to the
verification of identity requirement.
Although the new rules came into effect from 1 May 2016, the
Registrar General is allowing a transition period of three months
with full compliance required on and from 1 August 2016.
Clayton Utz communications are intended to provide
commentary and general information. They should not be relied upon
as legal advice. Formal legal advice should be sought in particular
transactions or on matters of interest arising from this bulletin.
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