With the increased use of electronic communications and electronic settlement technology, especially in these COVID times, verification of identity (VOI) has become increasingly important in reducing the risk of identity theft and fraud.
Real Estate lawyers Luke Hefferan and Matt Dolan explain why and when VOI is required and discuss the VOI standards required.
VOI is the process of verifying an individual is who they say they are and has the right to deal with land, or other property, either in their individual capacity or as a representative of a company.
Lawyers and other persons witnessing documents have always been required to take steps to verify the identity of the person signing the document. However, the rise of electronic conveyancing in Australia has seen the introduction of legislation, rules, and standards designed to codify this obligation.
When is verification of identity required?
VOI is required in the following circumstances:
Lawyers who subscribe to the electronic settlement and lodgement platform PEXA must comply with the Model Participation Rules (MPR).
For transactions involving dealings with the Titles Office (whether electronic of otherwise), each State or Territory has its own rules. However, in Queensland the Titles Office has adopted—
Within both sets of these rules are best practice standards for verifying identity known as the VOI Standard. While compliance with the VOI Standard is not compulsory, it will best position the lawyer to meet their overriding obligation to take reasonable steps to verify identity. So, for the most part, clients can expect lawyers will require them to comply.
If the transaction requires VOI, then the lawyer or other qualified witness must take reasonable steps to verify—
The standard documentation required for the VOI process is like the '100 point' system commonly used for banking and other identification processes. Various categories and combinations of documents may be used to prove your identity, including—
The lawyer and client must arrange a face-to-face meeting where original documents must be sighted, and the lawyer or other qualified witness must—
The requirement of a face-to-face meeting to complete the VOI may be time consuming for the client (and the lawyer) so a lawyer may engage an agent to complete the VOI. Then, the agent completes the VOI with the client and provides certification that the VOI has been completed in compliance with the lawyer's instructions.
The use of electronic videotelephony products, such as Zoom and Facetime, for completing verification of the individual and certifying original documents are not endorsed under the VOI Standard. However, there are easy-to-use digital VOI applications available which enable simple and swift VOI which a lawyer may determine satisfies their requirement to take reasonable steps to complete the VOI.
In addition to the verification of identity documents, the lawyer or other qualified witness should obtain supporting evidence to show the link between the individual and the party completing the proposed transaction. Supporting evidence can include—
A lawyer can rely on a previously completed VOI (for the same individual) for a period of two years.
Whilst there appear to be numerous hoops to jump through to verify an individual's identity, it is an important aspect of any transaction to ensure the risks of identity theft and fraud are minimised.
If you have questions about verification of identity our Real Estate lawyers can explain the requirements and answer any queries you may have.