Stricter identity checks introduced for property buyers

The NSW Land Property Information (LPI) now requires lawyers conducting conveyancing to verify the identity of the individuals or companies they represent, to ensure they have the authority to buy or sell land. (The new LPI standard appears in the new Conveyancing Rules, which are contained in section 12E of the Real Property Act 1900.)

The new rules have been initiated to stamp out the potential fraud of purchasers who live outside Australia, where previously, a Skype interview (and the sighting of identity documents that were flashed in front of a camera), was seen as sufficient evidence to verify the identity of the purchaser. It is thought that the new rules would also halt the practice of unscrupulous foreign buyers using the identity of an Australian citizen or resident to avoid the ‘foreigner surcharges’ that are added to property sales in NSW.

While it has been fairly routine for those living in NSW to meet face-to-face with their solicitor and provide original documents that verify their identity, those living off-shore have seemingly escaped the same standard of verification until now.

The Conveyancing Rules, enforced from 1 August 2016, require legal representatives to take reasonable steps to verify the identity of each of their clients and/or their client’s agents and any individual or entity to whom a Certificate of Title is to be provided (Rule 4.12 of the Conveyancing Rules).

If you are about to enter into a transaction involving property, you may want to ensure that your identity documents are both current, and complete, as you may end up delaying settlement should you need to apply to an authority for new or replacement identity documents.

Although the Rules took effect on 1 May 2016, the Registrar General allowed a transition period of three months whereby legal representatives will need to fully comply with the rules from, 1 August 2016.

The identification verification process

It is a condition of verifying an individual or entity’s identity to also verify that they are a ‘legal person’ and have the right to enter into a conveyancing transaction.

To verify your identity, you will be required to produce original and current documents to satisfy the Verification of Identification Standard. This is similar to the 100-point check banks conduct.

As a starting point, it is preferred that an individual produce their:

1. Original Australian Passport, or Foreign Passport (with an Australian Resident Visa label); and
2. Driver’s Licence or Proof of Age Card (or other Photo Card issued by a State or territory).
3. If applicable, you may also be required to produce a Change of Name documentation.

If you do not have any of the above documents, there are alternative categories of documents you will be required to provide, including additional documents such as birth certificates or citizenship certificates and/or Medicare cards and so on. If you are unable to provide certain documents within the listed categories, you may be required to provide a Declaration of Identity, together with your birth certificate (or citizenship certificate) and your Medicare card (or Centrelink card of Department of Veterans Affairs card).

If you are about to enter into a transaction involving property, you may want to ensure that your identity documents are both current, and complete, as you may end up delaying settlement should you need to apply to an authority for new or replacement identity documents.

Australia Post ID verification

At Streeterlaw, we have registered with Australia Post to conduct face-to-face identity checks for our clients who are seeking to buy, sell, or otherwise transfer property. Australia Post provides a leading verification service that is quick and easy and convenient for you, with more than 1,450 participating Post Offices nationwide.

Once you have attended Australia Post to verify your identity, a Verification of Identity Report is received by our offices, however, it will only be current for a period of two years from its date of issue.

If you have any questions in relation to a future property transaction, please contact Streeterlaw on 8197 0105 or email advice@streeterlaw.com.au

Written by Mark Streeter

The Director of Streeterlaw, Mark has been practicing Law since 1994. He has attained his Masters of Law in 1999 and in 2006 was awarded his Specialist Accreditation in Commercial Litigation. Mark is a member of ARITA, a graduate of the AICD and a member of AICM. A member of STEP, Mark enjoys working in the area of Wills and Estates. In 2020 Mark is the Chair of STEP NSW.

Call us on 02 8197 0105 to book an appointment with Mark Streeter!