Guide to verification of identity for paper conveyancing transactions for conveyancers, lawyers and mortgagees

Transcription

1 Guide to verification of identity for paper conveyancing transactions for conveyancers, lawyers and mortgagees This guide explains the Registrar s verification of identity requirements for paper conveyancing transactions. Who does this guide apply to? This guide applies to, who are required to take reasonable steps to verify the identity of their client, mortgagor, person to whom a Certificate of Title is provided and any person authorised to sign documents on their behalf. What are the verification of identity requirements? The verification of identity requirements for paper conveyancing transactions are set out in the Registrar s Requirements for paper conveyancing (Registrar s Requirements). The requirements are essentially the same as those for electronic conveyancing transactions. The Australian Registrars National Electronic Conveyancing Council (ARNECC) has published a Verification of Identity Guidance Note, which includes: What is verification of identity? Why is verification of identity required? When is verification of identity required? How is verification of identity to be carried out? Frequently asked questions The ARNECC guidance note is at Guidance Notes. Non-represented party must have their identity verified If any party to a paper conveyancing transaction is a non-represented party, they must have their identity verified by an Approved Identity Verifier (details of who these include will be available mid-november 2015). The Approved Identity Verifier will also witness the non-represented party signing any conveyancing documents. For additional information, refer to Guide to verification of identity for people not using a conveyancer or lawyer available at and land titles>forms, guides and fees>verification of identity. Frequently asked questions The following questions and answers are provided in addition to those in the ARNECC guidance note. Q1 A1 Where can I get a copy of the Registrar s Requirements? The Registrar s Requirements are available at and land titles>property information>publications.

2 Q2 A2 Are there any guides available on verification of identity? ARNECC has published the following five guidance notes: Guidance Note #1 Client Authorisation Guidance Note #2 Verification of Identity Guidance Note #3 Certifications Guidance Note #4 Right to Deal (draft) Guidance Note #5 Retention of Evidence (draft) The ARNECC guidance notes are an excellent resource, available at Guidance Notes. The ARNECC guidance note on verification of identity should be read in conjunction with these frequently asked questions. The Registrar of Titles (the Registrar) has also published two guides: lawyers and mortgagees (this guide) Guide to verification of identity for people not using a conveyancer or lawyer These guides are available at and land titles>forms, guides and fees>verification of identity. Q3 A3 Q4 A4 Q5 A5 When does the requirement to verify a client s identity take effect in Victoria? The Registrar has issued Version 1 of the Registrar s Requirements (see Q1), which, among other things, formalises verification of identity requirements. However, verification of identity is not new. Prudent practice already required conveyancers and lawyers to take reasonable steps to verify their client s identity. The Registrar s Requirements apply to any instrument signed on or after 9 November 2015 and require a conveyancer or lawyer to take reasonable steps to verify the identity of their client in a conveyancing transaction. Does the requirement to verify the identity of clients apply to paper instruments lodged or signed on or after 9 November 2015? For parties represented by a conveyancer or lawyer, the requirement to take reasonable steps to verify identity will apply to instruments signed on or after 9 November The requirement for nonrepresented parties applies to instruments signed on or after 1 December Will a conveyancer or lawyer have to verify the identity of clients who have already signed paper instruments that may not be settled or lodged until after 9 November 2015? It is already prudent practice for a lawyer or conveyancer to identify their clients. The Registrar has merely formalised this practice. The formalised requirement applies to all paper instruments signed on or after 9 November If the party is not represented, the requirement applies to instruments signed on or after 1 December Q6 When did the requirement for mortgagees to identify their mortgagor come into effect in Victoria? A6 The legislative requirement came into effect in September lawyers and mortgagees Page 2

3 Q7 A7 Q8 A8 Q9 A9 Q10 A10 Q11 A11 Q12 A12 Q13 A13 What steps do a conveyancer or lawyer need to take to verify the identity of their client (or a mortgagee to identify a mortgagor)? The conveyancer, lawyer or mortgagee is required to take reasonable steps to verify the identity of a client they represent or a mortgagor, in both an electronic and a paper conveyancing transaction. How this is done is up to the conveyancer, lawyer or mortgagee, as long as the steps taken are reasonable in the circumstances. The conveyancer, lawyer or mortgagee may undertake the verification of identity or it can be done by an agent (including an Identity Agent). Is a conveyancer or lawyer required to use an Identity Agent to have their client s identity verified (or does a mortgagee need to use an agent to identify a mortgagor)? The requirement is for a conveyancer, lawyer or mortgagee to take reasonable steps to verify the identity of their client or mortgagor. How this is done is up to the conveyancer, lawyer or mortgagee, as long as the steps taken are reasonable in the circumstances. The conveyancer, lawyer or mortgagee may undertake the verification of identity or it can be done by an agent (including an Identity Agent). What is an Identity Agent? An Identity Agent is an agent of the conveyancer, lawyer or mortgagee, who is reputable, competent and maintains the level of insurance set out in Schedule 3 of the Registrar s Requirements, and is authorised by the conveyancer, lawyer or mortgagee to conduct verification of identity. What is an Approved Identity Verifier? An Approved Identity Verifier is an organisation approved by the Registrar solely for the purpose of verifying the identity of non-represented parties (details of Approved Identity Verifiers will be available mid-november 2015). Can an employee of the conveyancer, lawyer or mortgagee conduct verification of identity? This is a business decision for the conveyancer, lawyer or mortgagee to make. The obligation is on a conveyancer, lawyer or mortgagee to take reasonable steps to verify the identity of their client or mortgagor. How this is done is up to the conveyancer, lawyer or mortgagee, as long as the steps taken are reasonable in the circumstances. In what circumstances will be required to undertake verification of identity? These are set out in Requirement of the Registrar s Requirements and include taking reasonable steps to identify clients, mortgagors, people authorised by the conveyancer or lawyer to sign and certify instruments and people to whom Certificates of Title are provided. Must the Verification of Identity Standard in Schedule 1 of the Registrar s Requirements be used to verify the identity of clients and mortgagors? It is not a requirement to use the Verification of Identity Standard to verify the identity of clients and mortgagors. The requirement is for the conveyancer, lawyer or mortgagee to take reasonable steps to verify their client s or mortgagor s identity. What those steps are in each particular circumstance is for a conveyancer, lawyer or mortgagee to decide. They can take their own reasonable steps or they can use the Verification of Identity Standard. lawyers and mortgagees Page 3

4 Q14 A14 Q15 A15 Q16 A16 To what paper instruments does verification of identity apply? Is it only transfers, mortgages and caveats, as it is in PEXA? The requirement relates to all types of paper instruments that can be lodged with the Registrar under the Transfer of Land Act 1958, Subdivision Act 1988 or any other legislation. Does verification of identity apply to both the transferor and the transferee? Yes. The requirement is for the conveyancer or lawyer to take reasonable steps to verify the identity of their client. This will apply to both the transferor and transferee whichever party is their client. If a conveyancer or lawyer signs a caveat on behalf of a caveator, is it the person who signs the caveat or the caveator that must have their identity verified? It is the caveator who must have their identity verified. The requirement is for a conveyancer or lawyer to take reasonable steps to verify the identity of a client, regardless of whether the caveat is signed by the client or by the conveyancer or lawyer on behalf of the client. Q17 Do the verification of identity requirements extend to agreements under the Water Act 1989, for example community agreements and rights of access agreements? These agreements are signed by all landowners but the application forms to lodge the agreements are usually signed by the conveyancer or lawyer? Does verification of identity need to be undertaken for each landowner? A17 The requirement is for a conveyancer or lawyer to take reasonable steps to verify the identity of a client. The conveyancer or lawyer must verify the identity of the person or people they represent. In relation to the types of agreement discussed, it is a matter for the conveyancer or lawyer to determine who is the client. Once this question is answered, the scope of the requirement should be clear. Q18 A18 Q19 A19 Do the verification of identity requirements extend to section 173 agreements under the Planning and Environment Act 1987? These agreements are entered into between the council, the landowner and in some cases third parties; but, the application forms to lodge the agreements are usually only signed by the council, by the CEO or a delegate. Does verification of identity need to be undertaken for everyone that signs the agreements? Or only on the councillors, CEO or council delegate signing the application form? The requirement is for a conveyancer or lawyer to take reasonable steps to verify the identity of a client. The conveyancer or lawyer must verify the identity of the person or people they represent. In relation to the type of agreement discussed, it is a matter for the conveyancer or lawyer to determine who is the client. Once this question is answered, the scope of the requirement should be clear. Are there exemptions to the verification of identity requirements in the case of entities, such as statutory authorities or local government bodies? There are no exemptions to the verification of identity requirements. The requirement is that a conveyancer, lawyer or mortgagee take reasonable steps to verify the identity of their client or mortgagor. That requirement applies to all clients or mortgagors, whether they are individuals or bodies corporate. lawyers and mortgagees Page 4

5 Q20 A20 What steps does a conveyancer, lawyer or mortgagee have to take to verify the identity of a corporate client? The requirement is that a conveyancer, lawyer or mortgagee take reasonable steps to verify the identity of their client or mortgagor. If a client or mortgagor is a body corporate or an incorporated association, these steps could include all of the following: confirming the existence of the body corporate taking reasonable steps to establish the person who is authorised to sign on behalf of the body corporate or witness the affixing of any seal verifying the identity of the individual(s) who are authorised to sign or affix the seal on behalf of the body corporate. Q21 A21 Q22 A22 Requirement 3.1.2(c) of the Registrar s Requirements relates to verifying the identity of people to whom Certificates of Title are provided. How does this apply to settlements? Registrar's Requirement 3.1.2(c), which mirrors Participation Rule 6.5.1(c), was designed to only apply when a Certificate of Title is being given to a client or a mortgagor. It does not apply to parties participating in a settlement, including when a settlement agent is acting for a party in order to collect the Certificate of Title and transfer documentation. If a Power of Attorney is used, is it only the attorney that needs to have their identity verified? Or does the principal also have to have their identity verified? If a Power of Attorney is used, the conveyancer, lawyer or mortgagee must take reasonable steps to verify the attorney s identity and authority. If the attorney is an individual, the steps could include all of the following: confirming the details of the person appointing the attorney and the attorney from the power of attorney taking reasonable steps to establish that the conveyancing transaction is authorised by that power of attorney verifying the identity of the attorney. If the attorney is a body corporate, the steps could include all of the following: confirming the details of the person appointing the attorney and the attorney from the power of attorney taking reasonable steps to establish that the conveyancing transaction is authorised by that power of attorney confirming the existence of the body corporate taking reasonable steps to establish the person who is authorised to sign on behalf of the body corporate or witness the affixing of any seal verifying the identity of the individuals who are authorised to sign or affix the seal on behalf of the body corporate. It would be up to the conveyancer, lawyer or mortgagee to decide whether or not to verify the identity of the person giving the power. lawyers and mortgagees Page 5

6 Q23 A23 Q24 A24 Is the person who verifies the client s or mortgagor s identity also required to witness the instrument signed by the client or mortgagor? Except for non-represented parties, the person conducting the verification of identity is not required to witness the execution of the instrument. However, it might be considered prudent practice to undertake the two actions at the same time, whenever possible. It is expected that the conveyancer, lawyer or mortgagee ensures the document is actually signed by their client or mortgagor, whose identity has been verified. Will a conveyancer, lawyer or mortgagee have to re-verify the identity of their client or mortgagor for whom they have acted in a previous transaction? The client or mortgagor need not be re-verified if the conveyancer, lawyer or mortgagee has taken reasonable steps to do both of the following: verify the identity of their client or mortgagor within the previous two years ensure that the client or mortgagor they are dealing with is one and the same as the client or mortgagor whose identity was already verified by them. After two years, it is up to the conveyancer or lawyer to assess what is reasonable in the circumstances. Q25 A25 Q26 A26 Q27 A27 Q28 A28 Can a conveyancer, lawyer or mortgagee rely on a verification of identity of their client or mortgagor conducted by (or on behalf of) another conveyancer, lawyer or mortgagee? The requirement is for the conveyancer, lawyer or mortgagee to take reasonable steps to verify their client s or mortgagor s identity. What those steps are in each particular circumstance is for a conveyancer, lawyer or mortgagee to decide. Will the identity of a long-standing client or mortgagor need to be verified? The requirement is for the conveyancer or lawyer or mortgagee to take reasonable steps to verify their client s or mortgagor s identity. What those steps are in each particular circumstance is for the conveyancer, lawyer or mortgagee to decide. What happens if a client or mortgagor requires urgent assistance and there is no time to verify their client s or mortgagor s identity? The requirement is for the conveyancer, lawyer or mortgagee to take reasonable steps to verify their client s or mortgagor s identity. What those steps are in each particular circumstance is up to the conveyancer, lawyer or mortgagee to decide. What should a conveyancer, lawyer or mortgagee do if they suspect the identity documents provided are not genuine or do not represent a reasonable likeness to the person being identified? The requirement is for the conveyancer, lawyer or mortgagee to take reasonable steps to verify the identity of their client or mortgagor. When doubt arises, or should reasonably have arisen in relation to a transaction and/or a client s or mortgagor s identity, the conveyancer, lawyer or mortgagee should seek further evidence or make further enquiries. If after having done so the conveyancer, lawyer or mortgagee is not satisfied, then the conveyancer, lawyer or mortgagee should decline to act further in the transaction. lawyers and mortgagees Page 6

7 Q29 A29 What steps do a conveyancer, lawyer or mortgagee need to take to verify the identity of their client or mortgagee who is overseas? The conveyancer, lawyer or mortgagee needs to decide what steps to take to verify the identity of their client or mortgagor, having regard to the available services and options under the circumstances. One option may be to utilise the services of the Australian consular office, coupled with additional steps in order for the conveyancer, lawyer or mortgagee to be reasonably confident in their client s identity. For example, the following process may be available: the conveyancer, lawyer or mortgagee could direct their client or mortgagor to attend a consular office with specified identity documents the consular office is then able to certify copies of these identity documents and provide them to the client or mortgagor for return to their conveyancer, lawyer or mortgagee the conveyancer, lawyer or mortgagee would be able to the Department of Foreign Affairs and Trade to verify at which consular office, when and by whom the certifications were given the conveyancer, lawyer or mortgagee could also use a document verification service to verify the identity documents. Whether or not the above process will constitute reasonable steps will be dependent on the circumstances of the individual case and what other options for verification of identity were available to the conveyancer, lawyer or mortgagee. For instance, an international financial institution or law practice would be able to use their overseas personnel to conduct verification of identity. Q30 A30 Q31 A31 Will the Registrar require proof that the identification has occurred and, if so, what paperwork is needed for this? The Registrar does not require evidence of verification of identity at lodgement; however, the Registrar may, when examining a dealing, call for production of the evidence. What are the requirements for retention of evidence supporting verification of identity? Evidence must be retained by the conveyancer, lawyer or mortgagee for seven years from the date of lodgement of the instrument to support that reasonable steps were taken to verify the identity of clients or mortgagors; people who are authorised by the conveyancer, lawyer or mortgagee to sign and certify instruments and documents; and people to whom a Certificate of Title was provided. If a non-represented party is a party to a conveyancing transaction, that party will also be required to retain supporting evidence for seven years from the date of lodgement of the instrument they signed at Land Victoria. If the Verification of Identity Standard was used, this evidence must demonstrate that the procedure for the standard was followed. If alternative reasonable steps were used to verify identity the evidence must show what these steps were. lawyers and mortgagees Page 7

8 Q32 A32 How can the verification of identity evidence be stored? The evidence can be retained in a range of ways. It could be stored electronically and/or by an agent on behalf of a conveyancer, lawyer or mortgagee. However, the medium and means in which documents supporting the conveyancing transaction are to be retained is to be determined by a conveyancer, lawyer or mortgagee in light of the possible need to produce those documents as evidence to a court. Regardless of the way in which it is stored, evidence should be accessible, legible and secure. Further information is contained in the draft ARNECC guidance note: Retention of Evidence. Q 33 A33 If the Registrar calls for production of supporting evidence of verification of identity, and it is found that a party has not had their identity verified, does this invalidate the instrument? If the Registrar, when examining a lodged but unregistered dealing, calls for production of evidence of verification of identity and the evidence could not be produced, then the Registrar will most likely refuse to continue processing the dealing unless or until he can be satisfied that it is one made by the party named see section 27AB of the Transfer of Land Act The Registrar has no intention to routinely call for production of evidence of verification of identity. It would only occur if some other element of the dealing concerned the Registrar. Q34 A34 Q35 A35 Q36 Q36 Q37 A37 A38 A38 What are the certification requirements and when do they come into effect? The certification requirements are set out in Schedule 4 of the Registrar s Requirements and essentially relate to verification of identity, client authorisation, retention of evidence and correctness. Certifications will come into effect on 3 April Is there any transition period for verification of identity? There is no transition period. Prudent practice already required conveyancers and lawyers to take reasonable steps to verify their client s identity and authority. What does the reference to a client s or mortgagor s authority mean? Is this verifying that the person signing the instrument is authorised to do so? Or, is this a reference to a requirement to use the Client Authorisation Form? Authority relates to a client s or mortgagor s right to enter into a conveyancing transaction. This is commonly referred to as the client s or mortgagor s 'right to deal'. Verification of the right to deal is closely linked to verification of identity. This is dealt with in requirement 3.2 of the Registrar's Requirements and further information is contained in the draft ARNECC guidance note: Right to Deal. What happens if a party is not represented by a conveyancer or lawyer? On or after 1 December 2015, a party to a conveyancing transaction who is not represented by a conveyancer or lawyer must have their identity verified by an Approved Identity Verifier (see Guide to verification of identity for people not using a conveyancer or lawyer available at and land titles>forms, guides and fees>verification of identity) who, at the same time, will witness that party s signing of the conveyancing document. What happens if the conveyancer, lawyer or mortgagee incorrectly identifies their client or mortgagor? It depends on the outcome of the conveyancing transaction to which their client or mortgagor was a party. If questions are raised about the validity of the instrument signed by that client or mortgagor, in most cases it will be for a court to decide. lawyers and mortgagees Page 8

9 A39 A39 What are the risks of verification of identity? Any risk relates more to the absence or lack of due diligence when conducting verification of identity. For example, further enquiries should be made when doubt arises, or should reasonably have arisen in relation to a transaction and a person s identity. The Registrar s Requirements require further steps to be taken when: an identity document does not appear to be genuine a photograph on an identity document is not a reasonable likeness the person being identified does not appear to be the person to which the identity documents relate it is otherwise reasonable to take further steps. Some circumstances when it may also be reasonable to take further steps could include: If the client or mortgagor has very limited identity documents without explanation when the conveyancer, lawyer or mortgagee becomes aware the identity documents have been cancelled if the identity documents and the instrument appear inconsistent, such as differing signatures when an agent is used and there appears to be inconsistencies in the supporting documentation they provide in relation to verification of identity. Examples of further steps that could be taken include (but are not limited to) obtaining more identity documents, making enquiries with the client, mortgagor or third parties, and using electronic verification services. Some circumstances may not be directly linked to verification of identity but may raise awareness that extra care should be taken in relation to a particular transaction and the person being identified. For example, the transaction is urgent; the conveyancer, lawyer or mortgagee doubts the veracity of the instructions; the transaction involves a non-standard mortgage of an unencumbered title; or, the client has limited English. While such transactions may be legitimate, it may be necessary to verify the circumstances surrounding the transaction. For example, checking the reason for urgency or engaging an independent interpreter. Q40 A40 Are there any privacy concerns and how can these be mitigated? As with other aspects of a conveyancing transaction, retention of personal information gives rise to privacy obligations. Storage of a client s or mortgagor s personal information is not a new obligation. Conveyancers, lawyers and mortgagees are already required to retain their client s or mortgagor s records and files for seven years. Further information Registrar s Requirements for paper conveyancing transactions under Section 106A of the Transfer of Land Act 1958 at and land titles>property information>publications Guide to verification of identity for people not using a conveyancer or lawyer at and land titles>forms, guides and fees>verification of identity Australian Registrars National Electronic Conveyancing Council s Model Participation Rules Guidance Note 2 Verification of Identity available at Guidance Notes lawyers and mortgagees Page 9

10 Contact us For location and contact details, refer to and land titles>forms, guides and fees>contact Land Victoria. The State of Victoria Department of Environment, Land, Water and Planning 2015 This work is licensed under a Creative Commons Attribution 4.0 International licence To view a copy of this licence, visit lawyers and mortgagees Page 10