A prudent conveyancer would have always taken reasonable steps to verify the identity of the client and the client’s authority to deal in a transaction.
New Conveyancing Rules have now been introduced by the NSW Government’s Land and Property Information (LPI) to mandate appropriate steps are taken, such that:
• Every client (or person acting on behalf of the client) must have their identity and authority verified;
• Evidence supporting the verification must be kept for at least 7 years.
One of the drivers for this requirement is the introduction of electronic lodgements and settlements and the NSW Registrar General has defined a set of “Model Participation Rules” for those electronic transactions. Within the Model Participation Rules is a standard for VOI. If the Conveyancer follows the standard, then they will be deemed to have taken reasonable steps and thereby will be afforded “safe harbour” in the event of a fraud.
To be within the standard, the Conveyancer may undertake a client interview personally or use an identity agent to do so. For Australian clients, there are several identity agents, one of which is Australia Post and for overseas clients, an Australian Embassy or Consular Office will need to be found. In all cases, the standard needs to be followed. The person being verified must produce original documents, which are grouped in client categories, the key documents being passport and drivers licence.
If the standard is not followed, then the Conveyancer must take alternative reasonable steps and the reasonableness will be determined by the circumstances of the situation.
Difficulties can arise for certain clients because:
• Attending the office of an identity agent or having them come to you can involve significant time, travel and cost,
• Not all Australia Post branches participate as identity agents,
• The key documents may not always be held and available.
For more information go to the NSW Land and Property Information at http://www.lpi.nsw.gov.au/registrar_general/verification_of_identity_and_the_right_to_deal