Australia: Verification of identity in conveyancing transactions in New South Wales

Last Updated: 26 October 2016
Article by Sara Hatcher

On 1 May 2016, the NSW Conveyancing Rules were introduced by the Registrar General pursuant to section 12E of the Real Property Act 1900. They have placed stringent requirements on conveyancers and solicitors (representatives) to verify the identity of all conveyancing clients.

While it was always best practice to verify the identity of clients, these rules have set specific requirements which must be met in conveyancing transactions.

The representative must verify the identity of each client by either applying the Verification of Identity Standard or taking other reasonable steps. What constitutes reasonable depends on factors such as how long the representative has known the client or whether they have acted for them previously.

The Standard is set out in Schedule 8 of the Participation Rules for Electronic Conveyancing and includes:

  • Verification of Identity (VOI) must be conducted during a face-to-face in-person interview;
  • The client must produce original documents in one of the categories in the table set out in the Participation Rules. You must start at category 1 (passport and drivers licence). If category 1 cannot be met, move to category 2, and so on. If category 5(a) and 5(b) are used, a declaration must be made as well;
  • The verifier must sight the original documents and retain copies;
  • The documents must be current, however Australian passports can be expired provided they have not been cancelled and were current within the preceding two years.
  • There are additional rules for verifying the identity of Body Corporates and Attorney's.
  • The verification remains valid for two years and can be used for multiple matters for that client.

A representative can use an Identity Agent who can conduct the VOI on behalf of the representative. The representative must instruct the Agent to use the Standard. The Agent must provide the representative with certified copies of the documents relied on as well as an Identity Agent Certification (set out in Schedule 9 of the Participation Rules).

There are several Identity Agents, some of which require the client to attend the post office and some of which will come to the client. The identity agents provide the representative with the VOI Report which includes a photo of the client and copies of the identity documents.

The representative must retain the supporting evidence for seven years from the date of lodgement of the registered dealing.

While the legislation does not specify when the VOI is to be conducted it must be conducted prior to title being conveyed. We are of the view however that as a representative cannot act in a transaction to convey title without the VOI having been carried out the logical time to obtain VOI is prior to exchange of contracts. If you do not carry out VOI until after contracts are exchanged and then subsequently discover there is a concern about the identity of either buyer or seller then you need to deal with a possibly fraudulent transaction and the implications of that.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Authors
Sara Hatcher
 
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