Verification of Identity Rules
With the increasing popularity of e-Conveyancing, safety of transactions become a top priority to ensure that clients’ title and funds are not compromised, whilst enjoying the expediencies.
From 1 August 2016, all law firms and solicitors participating in e-Conveyance will need to verify their client’s identity according to the procedure set out in the Participation Rules of e-Conveyancing. However, if you think that the requirement only applies to e-Conveyancing, you might be at risks of not carrying out your Verification of Identity (“VOI”) obligations.
The new Section 12E of Real Property Act 1900 has enabled the Registrar General to make VOI rules for paper conveyancing transactions, which has now become the Conveyancing Rules – Version 1. We believe, soon enough, it will become a standard practice for all clients solicitors deal with.
So, what are the steps need to be taken and options clients have?
Conveyancing Rules 4.1.2 requires reasonable steps to be taken to either:
- Applying the VOI Standard; or
- In some other way that constitutes reasonable steps.
And
- To ensure that the client is a legal person and has the right to enter into the transaction.
The rules apply to:
- Each client or each of the client’s agent; and
- The persons to whom the certificates of title are provided
Further steps will need to be taken, if the representatives have reason to know or ought to reasonably know that the person’s identity is not genuine.
It is also important to know that the VOI is not valid forever once it is done. A VOI is valid for a period of two (2) years and the practitioners need to retain the records for seven (7) years as evidence for VOI.
Options
Of course, the practitioners can always carry the responsibilities themselves by:
- Conduct a face to face interview with the client;
- Verify the documents set out in Schedule 8 of the Participation Rules: and
- Take any other steps that constitute reasonable steps.
However, this method can be onerous and impracticable for some practitioners, especially if the client is based in a distanced area or immobile.
Here are the alternatives:
- Register with AusPost for Verification of Identity. Client may attend the closest post office to have their identity verified and AusPost will send you an electronic proof of identity.
- Register with one of the VOI agents. LEAP is now bundled with IDfy (by Infotrack). Other options are ZipID and IDSecure. The advantage of these clients are that they can send ID agent to the client anywhere in New South Wales. But they will cost some fees.
- For overseas client, the only method currently available is through Australia Embassy and Consulate.
Whilst these methods might cost some fees, but it reduces the onus of the practitioner, and could be more convenient for the clients. Practitioners should register with at least one of the agents, even just as a backup options.
Below are some resources that might help you to understand the rules: