The Real Property Amendment (Electronic Conveyancing) Act 2015 introduced a new section 12E into the Real Property Act 1900 which allows the Registrar General to make Conveyancing Rules. The Conveyancing Rules will largely parallel provisions in the Participation Rules for electronic conveyancing. The Rules will facilitate aligning paper conveyancing practices and workflows with those developed for electronic conveyancing and will be implemented in stages.
The first version of the Conveyancing Rules standardise formal verification of identity and authority (right to deal) requirements across all conveyancing including:
- requirements for verification of identity
- requirements for verifying authority
- supporting evidence requirements.
Download The Conveyancing Rules (PDF 311.9 KB).
Verification of Identity
Rule 4.1 of the Conveyancing Rules applies to Australian legal practitioners, law practices and licensed conveyancers ('Representatives'). From 1 August 2016 a Representative must take reasonable steps to verify the identity of clients or their agents, and persons to whom certificates of title are given.
A Representative can either:
- apply the Verification of Identity Standard; or
- verify the identity of a person in some other way that constitutes the taking of reasonable steps.
The requirement for reasonable steps is to provide flexibility for Representatives to use their professional judgement on what is necessary in any particular circumstance. The Representative determines what steps are required to verify a person’s identity in any particular circumstance. What constitutes reasonable steps may be influenced by various factors that when taken into account contribute to a Representative being able to reasonably have confidence in the person’s identity.
Examples of these factors might include the length of time the Representative has known the person or whether they have represented the person on previous occasions.
Should a Representative choose to follow the Verification of Identity Standard they may be deemed to have taken reasonable steps- however the Standard is not intended to be the only way of complying with the reasonable steps requirement.
The Verification of Identity Standard is the standard set out in Schedule 8 of the Participation Rules determined under the Electronic Conveyancing National Law. Download NSW Participation Rules for Electronic Conveyancing (PDF 589.7 KB).
For more information, including other ways that constitute taking reasonable steps, and how to identify a client who is overseas, see Model Participation Rules Guidance Note # 2 - Verification of Identity on the ARNECC website.
Rule 4.2 of the Conveyancing Rules provides that a Representative may use an Identity Agent to perform verification of identity.
Verifying the identity of mortgagors
Section 56C of the Real Property Act 1900 requires a mortgagee to take reasonable steps to identify the mortgagor.
For more information on mortgagee obligations refer to the LPI Fact Sheet Verifying the identity of Mortgagors: Mortgagee Obligations (PDF 123.0 KB).
For changes to Verification of Identity requirements for mortgages executed on or after 1 January 2015 see Circular 2015/09 Changes to Verification of Identity (VOI) requirements for mortgagees (PDF 72.8 KB).
Verification of Authority (Right to deal)
Rule 4.3 of the Conveyancing Rules requires that a Representative take reasonable steps to verify that a client is a legal person and 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 is 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.
For more information see Model Participation Rules Guidance Note # 4 - Right to Deal on the ARNECC website.
More information about identity theft and strategies for limiting its impact is available from:
- the Australian Crime Commission www.crimecommission.gov.au/publications
- the Australian Attorney General's Department Identity Security www.ag.gov.au/identitysecurity
- the website Protect Your Financial Identity www.protectfinancialid.org.au/Home/default.aspx established by the Australian Bankers Association, the Australian Securities and Investment Commission and the Australian High Tech Crime Centre.
Rule 5 of the Conveyancing Rules requires that a Representative, or where there is no Representative, a Party must retain the evidence supporting the dealing for at least seven years from the date of lodgment of the dealing that is registered or recorded including any evidence supporting verification of a Party’s identity.
The evidence does not need to accompany the dealing when lodged with LPI.
For more information on supporting evidence see Model Participation Rules Guidance Note # 5 - Retention of Evidence on the ARNECC website.