As of 9 November 2015, Land Victoria is enforcing new requirements for all Legal Practitioners and Conveyancers pursuant to s106A of the Transfer of Land Act 1958 to verify a client’s identity.
Verification of Identity is a process carried out to ensure that a person is who they claim to be. The purpose of carrying out verification of identity is to reduce the risk of identity fraud and the registration of fraudulent land transactions.
A conveyancer, lawyer or mortgagee is required to take reasonable steps to verify the identity of a client, regardless of whether they are an individual or corporate entity.
How to verify individual identity?
A client’s identity can be verified face to face by perusing the original identification documentation and photocopying the identification for the file.
Alternatively, clients can attend an Australia Post office (1,450 participating Post Offices nationally), to arrange verification of their identity or book an appointment with an identity agent, such as Zip ID who will go to the clients to carry out the verification. A ZipID appointment can be booked by the lawyer on behalf of the client or booked by the client. ZipID Appointments can be booked anytime for work or home, Monday to Saturday.
There are six categories of acceptable documents set out in the Verification of Identity (VOI) standards.
How to verify the identity of corporate entities
For corporate entities, the identity verification procedure will be more involved as it is necessary for the lawyer to:
- Conduct a search of the records of the relevant regulatory body (such as ASIC for companies);
- Take reasonable steps to identify the person/s authorised to sign, or witness the affixing of any seal, on behalf of the corporate entity; and
- Verify the identity of each person who will sign the paper registrable instrument or dealing on behalf of the corporate entity.
Where an individual or corporate entity has appointed an attorney to execute a paper registrable instrument or dealing, the solicitor will have to review the Power of Attorney and carry out similar identity verification procedures in relation to that attorney.
The implications for failure to comply with the new legislation is currently unclear. Whereas the implications of a mortgagee failing to take reasonable steps to verify the identity of a mortgagor are catastrophic: namely the loss of any capacity on the part of the mortgagee to enforce the mortgage and recover the funds advanced.
While it is difficult to imagine, at this point in time, that any real or perceived failing on the part of a legal practitioner could affect the registrability of a dealing in a conveyancing transaction, all due care and attention should be employed to carry out the requirements of the new legislation.