Posted on August 23, 2016 by

Who are you? – Verification of Identity and the Right to Deal in Conveyancing Transactions

Lawyers and conveyancers around NSW are now required to take “reasonable steps” to verify the identity of their clients and establish their clients’ right to deal in a wide range of “Conveyancing Transactions”. This requirement is the result of new Conveyancing Rules introduced earlier this year. On 1 August 2016, full compliance with these rules became mandatory. Below, we explain the implications of these changes for parties to “Conveyancing Transactions” and provide a brief overview of what clients must provide to their lawyers or conveyancers as part of this process.

The purpose of the new requirements is to minimise fraudulent transactions and mitigate the effects of identity theft. The verification of identity requirements are similar to the “100 points of ID” used to open a bank account.

When will I need to provide identity documents?

The verification of identity and right to deal requirements apply to “Conveyancing Transactions.” These include transactions that involve 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 register, or
• to get the registration, note or record of something in the titles register changed, withdrawn or removed.

Verification of identity will need to be conducted before a client enters into any of the above “Conveyancing Transactions”.

How do I prove it’s me?

Many clients may have long standing relationships with their lawyers and conveyancers with the result that it may not be necessary to check identity documents to verify that particular client’s identity. However, in most cases it will be necessary for clients to attend a face-to-face, in-person interview with their lawyer or conveyancer and produce identity documents so that the lawyer or conveyancer can check that the facial features of the person in the identity documents match the facial features of the individual that they are meeting with. The interview also allows the lawyer or conveyancer to inspect the identity documents and verify that they are genuine and have not been tampered with.

Identity documents are ranked in a hierarchy of categories and clients should take with them to their interview the highest category of identity documents that they have.  Some of the documents which may be relied upon (ranked in order of priority) include:

• Passport
• Australian Drivers’ Licence or Photo Card
• Change of Name/Marriage Certificate
• Birth Certificate/Citizenship Certificate/Descent Certificate
• Medicare or Centrelink card

A full list of documents which may be relied upon, may be found in Schedule 8 of the NSW Participation Rules (Version 3) on page 46.

Only documents which have not expired can be relied upon, except Australian passports which can be used if they expired less than 2 years prior to the interview.

Once a client’s identity is verified, that verification will remain valid for 2 years.

Is anything else required?

Although a client’s identity may have been verified and they have provided instructions to enter a “Conveyancing Transaction” their lawyer or conveyancer must still establish that they have a right to deal with that interest eg. buy/sell a property, register a VPA or lodge a caveat.

In this step of the process lawyers and conveyancers will be attempting to establish their client’s authority to enter the transaction and tie them to the land/interest claimed. In the case of a vendor, sufficient evidence may be a title search or a Council rates notice or utilities bill. In the case of a purchaser, loan documentation or a contract for sale may suffice.

What will be more important however is when a client is a corporation or statutory body. In these cases, the lawyer or conveyancer will need to establish that a particular individual (usually the person providing their instructions) has authority to enter into a legally binding contract on behalf of the corporation or statutory body. In order to establish this, lawyers and conveyancers may need to conduct company searches to establish who the directors of the company are or review powers of attorney, statutes or resolutions to establish that an individual has delegated authority, the authority has not expired and entering into the transaction is within the scope of that authority.

For further information regarding verification of identity and the right to deal, please contact Lindsay Taylor Lawyers on 02 8235 9700.