Verification of Identity in property transactions
Verification of Identity (VOI) is a process used to confirm a person’s identity.
Lawyers and other parties involved in property transactions have an obligation to ensure that the person claiming the right to deal with land is legally authorised to do so. This also involves confirming a person’s capacity to act as an agent for a company or as an attorney.
The VOI process is particularly important in land and property dealings, as it assists in reducing identity theft and land title fraud.
The need for stringent VOI processes has arguably become greater since the introduction of electronic conveyancing, which allows property transactions to be completed on-line.
What is the Verification of Identity Standard?
Under the Electronic Conveyancing (National) Law Queensland Act 2013 the Registrar of the Department of Natural Resources and Mines may make rules regarding verification and identity requirements for property transactions.
The Model Participation Rules for Electronic Conveyancing set out a national framework for electronic conveyancing. These Rules include a Verification of Identity Standard which has been adopted by the Department in its Land Titles Practice Manual.
The law requires that reasonable steps must be taken by mortgagees and subscribers to electronic conveyancing to confirm the identity of a borrower or client, a client’s agent or persons to whom title deeds are being provided.
By complying with the VOI Standard in the Department’s Manual, lenders and subscribers to electronic conveyancing will be considered to have taken such reasonable steps.
How does the VOI process work?
Your lawyer will need to formally verify your identity during a face to face interview or using another method approved in the VOI Standard.
Your lawyer must be satisfied that he / she is dealing with the person claiming to be authorised to enter transactions regarding the property. Likewise, lawyers acting for the party on the other side of the property transaction must confirm the identity of their client. The idea is to create an ‘even playing field’ in the conveyancing and property transaction setting. By ensuring all sides to a transaction undertake diligent VOI measures the parties are better protected against property fraud.
If you are involved in a property transaction such as the sale or purchase of land or borrowing money secured by a mortgage, you will need to meet personally with your lawyer, other agency or financial institution to provide documents and formally prove your identity.
The documentation required for the VOI process is similar to the present ‘100 points’ system commonly used for banking and other identification processes. There are various categories and combinations of documents which may be used to prove your identity. These include an Australian or foreign passport, drivers licence or photo card, birth or citizenship certificate, Medicare, Centrelink or Department of Veterans’ Affairs card. For those who are not Australian citizens or residents, other types of documents may be used. Documents must be current and original.
If sufficient identification documents are not available, an Identifier Declaration may be used which enables another person to identify you. Your lawyer can advise you on this process.
Verification of Identity documentation relating to a property transaction must be kept securely by your Lawyer for 7 years. Once the VOI process is carried out, further verification need not take place for 2 years. This means that you need not undertake a further VOI process for a subsequent property transaction that occurs within 2 years of the initial VOI.
What if I cannot visit my Lawyer?
If you are unable to attend a face to face interview with your lawyer, an Identity Agent can be used to confirm your identity. This is practical for clients who are travelling or do not reside close to their lawyer’s office.
Australia Post and other authorised agents offer this service and your lawyer can refer you accordingly. The Identity Agent will complete the VOI process in a similar manner to that, required by your lawyer and provide an Identity Agent Certification.
What about companies and attorneys?
If a party involved in a conveyancing transaction is a corporate entity, a company search should be obtained to confirm the existence of the company and to establish those persons authorised to sign on behalf of the company. The authorised representatives will then need to personally complete the VOI process.
Similarly, attorneys entering transactions on behalf of their principal must provide the document authorising the transaction (such as a registered power of attorney) and complete the VOI process.
Verification of identity has always formed part of good professional practice and plays an integral role in both traditional and electronic conveyancing frameworks.
Identity theft leading to the registration of fraudulent documents and dealings over land is not a new phenomenon and can have devastating financial and other affects. Verification of Identity is an important safeguard against fraud and is an essential risk management tool.
Imposing standard and reciprocal requirements for professionals to identify their clients offers better protection against a possible fraud occurring with your property transaction.
For more information about VOI, talk to one of our experienced Property Lawyers or if someone you know wants more information or needs help or advice, please contact us on (07) 5443 4866 or email email@example.com.
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