Conveyancing Rules and Verification of
Identity
14 June 2016
Agenda
9:30
Introduction
Greg Channell
9:35
Conveyancing Rules and VOI
Director, Legal/Industry
Engagement/Governance
10:10
Identity Agents
10.10
•
ZipID
Sean Simmons
Head of ZipID
10:30
•
IDSecure
Mark Paholski
Managing Director
10:50
•
Australia Post
Paul Tumminello
Account Executive NSW
11:10
Q &A with all presenters
11.30
Close
Conveyancing Rules and Verification of Identity
Introduction
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Conveyancing and Digital Transformation
• The digital revolution is here and is ongoing
• It will change conveyancing in many ways, some
we can see and others as yet unforeseen
• The challenge for every one in every sector of
the property market is to find the opportunities
and benefit from them
“We have to recognise that the disruption that we
see driven by technology, the volatility in change
is our friend if we are agile and smart enough to
take advantage of it.” Malcom Turnbull
Some changes on the way
Changes that will impact conveyancing:
• Priority Notices to be introduced in late 2016
• Uniform National Mortgage (April 2017) - other national
Forms?
• 2016 edition Contract - Fed Govt issues
– Foreign Resident Withholding provisions
– Foreign Ownership register - s47 land tax certificate changes
• Electronic contracts and Electronic Vendor Disclosure
• Electronic communications with client (PEXA SettleMe)
• LPI scoping study
5
Conveyancing Rules and Verification of Identity
Introduction - Electronic
Conveyancing Update
6
EC Implementation in NSW
Release 1 – 8 October 2013
- Mortgages and
Discharges
- Big 4 banks + others
Release 2 – 14 November 2014
- Transfers, Caveats &
Withdrawals of Caveat
- Representative Subscribers
- Electronic settlement
Over 50,000 dealings lodged electronically
Over 1,100 Subscribers signed up in NSW
Next - Alignment rollout 1st half 2016
- Priority Notices October 2016
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e Dealing Lodgment Statistics to 3 June 2016
Total Release 1 Lodgments (DMs & Ms)
2923
R2 Dlg Type Totals:
DM:
25526
T:
368
M:
21270
WX:
213
X:
635
Total Release 2:
Total e Lodgments
48012
50935
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TOTAL SOLICITORS (NSW)
633
TOTAL CONVEYANCERS (NSW)
300
TOTAL SOLICITORS (VIC)
78
TOTAL CONVEYANCERS (VIC)
1
TOTAL SOLICITORS (QLD)
40
TOTAL SOLICITORS (ACT)
2
TOTAL SOLICITORS (WA)
5
TOTAL CONVEYANCERS (SA)
1
TOTAL SOLICITORS (SA)
TOTAL FIs
TOTAL SUBSCRIBERS IN NSW
3
46
1109
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Benefits of electronic conveyancing
• Eliminates long interactions with banks to arrange
settlement and physical attendance at settlement
• Eliminates gap (risk) between settlement and
lodgment
• Immediate confirmation of lodgment
• Earlier availability of cleared funds after
settlement
• No need to physically lodge documents with LPI –
particularly useful for caveats
• Easier access for rural and remote communities
Conveyancing Rules and Verification of Identity
Conveyancing Rules
11
Alignment of paper and electronic processes
Both electronic and paper conveyancing will continue in parallel for a while.
But the process will become the same –
• one process
• one workflow,
• one set of rules
Real Property Amendment (Electronic
Conveyancing) Act 2015
The Registrar General may make conveyancing
rules covering:
• the verification of identity and authority,
• client authorisations,
• certifications to be given
• retention of evidence
Phasing out of CTs
Priority Notices - Electronic only dealing
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Conveyancing Rules
• 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.
• Alignment provisions in the Conveyancing Rules will
largely parallel provisions in the Participation Rules
for electronic conveyancing.
• The Rules will align paper conveyancing practices
and workflows with those developed for electronic
conveyancing and will be implemented in stages.
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Conveyancing Rules
Real Property Act
• Section 12E - The Registrar-General may make conveyancing
rules covering, for example,
– verification of identity and authority,
– client authorisations,
– the retention of documents and evidence
– classes of documents that must be lodged electronically
• The Registrar-General may refuse to accept or register, or may
reject, a conveyancing transaction that does not comply with the
requirements of the conveyancing rules [s. 12E (9)]
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Conveyancing Rules and Verification of Identity
Verification of Identity (VOI)
Rules
Conveyancing Rules
Section 12E (1)(a) Verification of Identity and
Authority
• the standards to which identity and authority are to be
verified,
• the classes of persons whose identity and authority is
to be verified,
• the classes of paper documents to which verification
of identity and authority requirements apply,
• who can undertake verification of identity and
authority, and
• any supporting evidence and retention requirements
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VOI - Current Situation
• Formal VOI requirements currently apply
for:
– mortgagees to identify the mortgagor – s 56C
Real Property (RP) Act
– attesting witnesses – s 117 RP Act
– electronic transactions - Rule 6.5 NSW
Participation Rules
• Due diligence requirement to know client
VOI - Conveyancing Rules
• Version 1 commenced 1 May 2016, transition period
of 3 months before full compliance required on 1
August 2016
• Verification of Identity (VOI) requirements
• Reasonable steps
• Identity Agents
• VOI Standard (Sch 8 Participation Rules)
• Verification of Authority (right to deal)
• Retention of evidence
• Guidance notes on www.arnecc.gov.au
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VOI - Conveyancing Rules
• Apply to solicitors and conveyancers
• Formal (standardised) Verification of
Identity (VOI) requirements for all
conveyancing transactions
• Consistent national requirements across
paper and electronic
VOI - Conveyancing Rules
Rationale
• Significant fraud mitigation and consumer
protection measure
• Applying consistent requirements in all
paper and electronic conveyancing
transactions
VOI - Conveyancing Rules
What is required?
You must take reasonable steps to:
•
verify the identity of your client [R 4.1.2] either by:
– applying the VOI Standard
– or in some other way that constitutes reasonable steps [R 4.1.3]
and
•
•
ensure the client is a legal person and has the right to enter into
the transaction [R4.3.2]
Note
– Compliance with the National VOI Standard at Schedule 8 Participation Rules is
taking reasonable steps but – Further steps may be required – not just ticking the box
VOI - Conveyancing Rules
When are further checks required?
[R 4.1.4]
• Where you know or ought reasonably to know that:
• any identity Document produced by the Person Being
Identified is not genuine; or
• any photograph on an identity Document is not a
reasonable likeness of the Person Being Identified
• the Person Being Identified and/or the Identity Declarant
does not appear to be the Person to which the identity
Document(s) relate;
• it would otherwise be reasonable to do so.
VOI - Conveyancing Rules
The VOI Standard
• SCHEDULE 8 – NSW Participation Rules
• Published on LPI website – adopted
National model Rules
• Standard applies to electronic
conveyancing
• Mortgagee requirements under s 56C
• Now to conveyancing practitioners
VOI - Conveyancing Rules
The VOI Standard
• Requires face-to-face in-person interview
• Hierarchy of ID documents, highest possible category
must be used
• Documents must be current (except Passport < 2
years old)
• Where Documents contain photographs the Identity
Verifier must be satisfied that the Person Being
Identified is a reasonable likeness (for example the
shape of his or her mouth, nose, eyes and the position
of his or her cheek bones) to the Person depicted in
those photographs
VOI - Conveyancing Rules
What if you can’t meet the VOI Standard
• Take Reasonable steps
• If your client doesn’t have full documents
consider Category 5 an Identifier
declaration essentially a referee
• Do what you are able to do – if you have
done all you can it can hardly be
considered that you have been
unreasonable
VOI - Conveyancing Rules
The ARNECC Guidance Notes
ARNECC has published 5 Guidance Notes so far.
• MPR Guidance Note #2 – Verification of Identity
(Updated)
• MPR Guidance Note #4 – Right to Deal
• MPR Guidance Note #5 – Retention of Evidence
While these relate to the Participation Rules they
are equally relevant to the Conveyancing Rules
VOI - Conveyancing Rules
Options for conducting VOI:
• Do it yourself
• Use an Identity Agent
– ZipID
– IDSecure
– Australia Post
Links
Identity Agents
Australia Post
• http://auspost.com.au/travel-id/buying-or-selling-property.html
IDSecure Pty Ltd
• http://www.idsecure.com.au/
ZipID Pty Ltd
• https://zipid.com.au/
Software provider
Infotrack
•
https://www.infotrack.com.au/products/disruptive-technology/idfy-voi/
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Additional Information
• Conveyancing Rules
http://www.lpi.nsw.gov.au/__data/assets/pdf_file/0016/209410
/NSW_Conveyancing_Rules.pdf
• Participation Rules
http://www.lpi.nsw.gov.au/__data/assets/pdf_file/0017/206504
/NSW_Participation_Rules_Version_3.pdf
• ARNECC Guidance Notes
http://www.arnecc.gov.au/publications/mpr_guidance_notes
• www.lpi.nsw.gov.au/about_lpi/national_e-conveyancing_nsw
• Sign up to newsletter, inquiries
[email protected]
• ARNECC http://www.arnecc.gov.au/
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