From 1 August 2016 Australian legal practitioners, law practices and licensed conveyancers (representatives) must take reasonable steps to verify the identity of clients or their agents to ensure that
- The client is a legal person, and
- The client has the right to enter into a conveyancing transaction.
Possession of a Certificate of Title for a parcel of land is not of itself sufficient to prove that a person is the owner of that land or otherwise entitled to deal with it.
The increasing incidence of identity theft and associated fraud, including mortgage fraud means that all parties to land transactions and their agents must exercise due diligence in verifying the identity of persons claiming a right to deal in land.
Each state authority has introduced reforms for a new Verification of Identity (VOI) policy.
The VOI policy is creating a framework to ensure that sufficient steps have been taken to verify the identity of those involved in buying, selling or transferring property.
VOI is a standardised process that involves face-to-face verification of a person's identity at a VOI authorised facility such as a participating Australia Post branch.
For Australian citizens or residents, the minimum ORIGINAL documents to be produced at such a meeting are:
1. Australian passport or foreign passport; plus
2. Australian drivers licence or Photo Card; plus
3. Change of name or marriage certificate where applicable.
There are three ways to Identify Clients –
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- The client attends Australia Post with their ORIGINAL Identity documents (as above). Australia Post take photographs and forms are signed. The Identity is then sent via email to the Conveyancers Practitioners special portal with Australia Post. The ID forms part of data input into a Conveyancers Legal Practice Management system.
- The client attends the Conveyancers office in person with their ORIGINAL Identity documents, the Conveyancer take pictures of ID documents and the owner of the documents. The client and Conveyancer signs off confirming they are who they are and have taken reasonable steps to ID the Client.
- The client can be identified via an IDfy App without the Conveyancer seeing the person in the same room – VOI made simple.
Many people are too busy these days and cannot attend your office in person or go to a Post Office, however, VOI has been made simple with the IDfy App for both IOS and Android.
The Conveyancer emails a link to the Purchaser or Vendor to download the IDfy App, the Purchaser and Vendor take pictures of their ID, take a photo of themselves and sign off as to who they are, then the Conveyancer and Vendor or Purchaser connect on the IDfy App at the same time for a video meeting, where both sign off and take a Video and Picture and confirm from identity documents uploaded.
This is known as a remote session and is approved as taking reasonable steps to ID your clients’.
Recently a client did not like the idea I had to ID them under the new Conveyancing Rules of VOI.
I explained to them that this is because of the prevalence of Identity theft and fraudulent dealings in real estate and the ID is ultimately to protect the client our Firm is acting for.
I also explained that with the new PEXA online settlements Practitioners are now signing documents on behalf of clients, however, to use the PEXA online system as a Practitioner the ID of the client must be established through one of the accepted methods of Identity checks.
I have been identifying clients as a risk management tool since I started in private practice and I am very pleased the laws are now in place to make VOI mandatory.