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Verification of Identity for Land Dealings in New South Wales

NewsFlash 08 June 2016

NSW Land & Property Information (LPI) has announced the Verification of Identity Standards (VOI Standards) will be applied to all land transactions in NSW from 1 May 2016, with a transition period of 3 months and full compliance required from 1 August 2016. 

We recently discussed the VOI Standards in our NewsFlash titled 'New Verification of Identity Requirements for Land Transactions'. At the time of writing that article, the VOI Standards only applied to mortgage transactions in NSW. 

The Conveyancing Rules (Rules) were published by LPI on 28 March 2016, with the Rules taking effect from 1 May 2016. 

VERIFICATION OF IDENTITY

Rule 4.1 deals with verification of identity. 

A Representative (being an Australian legal practitioner, a law practice or a licensed conveyancer) must take reasonable steps to verify the identity of:

  • their clients, including each client or a client’s agent; and
  • persons to whom certificates of title are provided.

For the purposes of complying with the Rules, Representatives can apply the VOI Standards or verify the identity of a person in some other way that constitutes the taking of reasonable steps.

Further steps must be undertaken to verify the identity of a person where:

  • an identity document is not genuine, a photograph on an identity document is not a reasonable likeness of the person being identified or the person being identified does not appear to be the person to whom the identity documents relate; or
  • it would otherwise be reasonable to do so.

AUTHORITY (RIGHT TO DEAL)

Rule 4.3 deals with a party’s authority (or right to deal) with a parcel of land.  This Rule also took effect on 1 May 2016, with a transition period of 3 months and full compliance required from 1 August 2016.

The right to deal is the entitlement of a person to be a particular party to a conveyancing transaction.

For every conveyancing transaction dealing with land in NSW (such as a transfer, mortgage, charge, lease or dealing with an estate or interest in land) a Representative must take reasonable steps to verify that their client is a legal person who has the right to enter into the transaction. 

A mortgagee (ie. a bank or finance provider), or a Representative acting on behalf of a mortgagee, must for every mortgage dealing also take reasonable steps to verify that the mortgagor is a legal person who has the right to enter into the mortgage. 

The verification of right to deal is closely linked to the verification of identity and they should, where possible, be conducted simultaneously. 

Reasonable steps

In order to verify a right to deal a Representative must sight supporting evidence that includes the name of the person whose right to deal is being verified and the land or transaction details. 

If there is any doubt, more extensive checks and enquiries should be made in relation to a transaction and a person’s right to deal. 

Outgoing party

For a party relinquishing their interest in land in NSW, such as a seller in a sale of land, supporting documentation that will assist in establishing a right to deal includes:

  • government rates notices;
  • water, gas or electricity bills;
  • land tax assessments;
  • loan documentation; or
  • the certificate of title.

Incoming party

For a party gaining an interest in land in NSW, such as a buyer of land, supporting documentation that will assist in establishing a right to deal includes:

  • the contract of sale and purchase of land; and
  • loan documentation.

Further considerations

Further considerations may require additional steps to be taken to establish a person’s right to deal, such as:

  • if a party’s name differs on any supporting documentation – have they changed their name and can they provide documentation to prove this;
  • is a person acting under a power of attorney; or
  • is a party a successor at law to the registered owner of the land. 

If doubt arises as to a person’s right to deal, further enquiries must be made to ensure reasonable steps have been undertaken.  Examples include:

  • where documents being produced for verification are not genuine;
  • if the age of the person being verified does not align with the likely age of the person who has the right to deal; or
  • any circumstances that may raise suspicion or should be investigated further.

NEW RESIDENCY AND CITIZENSHIP IDENTIFICATION REQUIREMENTS

From 1 July 2016, the NSW Government has indicated that buyers and sellers of land in NSW will have to prove their residency and citizenship status before completion of a sale/purchase. 

A land tax certificate showing whether any money is owed will be required to be provided to a home buyer by the seller before completion. When applying for the certificate, a seller will be required to disclose their residency status and nationality. 

Also, as well as Foreign Investment Review Board approval, foreign buyers will be required to provide citizenship and visa details when having contracts and transfers stamped. 

The NSW Office of State Revenue will collect the new information on a buyer’s nationality and will pass the information to the Australian Tax Office for inclusion in a national register of foreign ownership of land titles. This new national register is to commence on 1 July 2016. 

TressCox Lawyers can assist with your verification of identity and verification of right to deal.


Martyn Tier, Partner
Sydney

Christopher Conolly, Partner
Sydney

Penny Evans, Partner
Sydney

Gary Newton, Partner
Sydney

NewsFlash 08 June 2016
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