Mortgagor Identification Requirements

Queensland

Section 11A(2) and Section 11B(2) of the Land Title Act 1994 (Qld) requires mortgagees to take reasonable steps to identify mortgagors or face cancellation of their mortgage. In addition, section 162(a) of the Land Title Act says that a witness must ‘take reasonable steps to ensure that the individual is the person entitled to sign the instrument’.

Sections 11A(3) and 11B(3) deems compliance with the Land Title Practice Manual (Queensland) for verification of identification of mortgagors as being reasonable steps. 

The publication of the Manual of Land Title Practice is authorised by 9A(2)(c) of the Land Title Act

Part 2-2005 of the Land Title Practice Manual (Queensland) reads:

Under the Land Title Act 1994 and the Land Act 1994, a mortgagee takes ‘reasonable steps’ if they comply with the practices included in this Manual. In essence, these practices reflect the ‘100 points of identification’ provisions under Commonwealth legislation governing certain financial transactions, namely, the Financial Transaction Reports Act 1988 (FTRA) and the Financial Transaction Reports Regulations 1990 (FTRR).

E-Conveyancing

The Participation Rules (version 1) were adopted on 1 December 2013 by the Registrar pursuant to section 23 of the Electronic Conveyancing National Law which is a schedule to Electronic Conveyancing (Adoption Of National Law) Act 2012 (NSW) which forms part of the law of Queensland by virtue of section 3 of the Electronic Conveyancing National Law (Queensland) Act 2013.

The rules adopted in Queensland, NSWVictoriaSouth Australia and Western Australia as part of the implementation of a national e-conveyancing system are near identical being based on the ARNECC model participation rules. 

The Verification of Identity Standard prescribes:

  1. A face-to-face in-person interview.
  2. The mortgagor must bear a “reasonable likeness” to the person depicted in photographs in the identification documents.
  3. The identification documents must be originals and be produced by the mortgagor.

The standard then prescribes the identity documents required in a cascading fashion. The Gold Standard being the possession of a passport and drivers licence. This obviating the need for anything else to be produced. Thereafter as less probative documents are produced more of them are required. Those presenting with a dearth of documentation are required to be accompanied to the face-to-face interview by an “Identity Declarant” who themselves must be indentified in accordance with the standard and in certain circumstances must be a member of specified professions.

The standard requires that the person identifying the mortgagor provide a certification in a prescribed form. It is also necessary for the lender to obtain a completed client authorisation form.

New South Wales

Section 56C of the NSW Real Property Act requires mortgagees to take reasonable steps to identify mortgagors or face cancellation of their mortgage. Section 56C(2) deemed steps prescribed by the regulations as reasonable as being reasonable for the purposes of s56C.

Regulation 16 of the Real Property Regulation 2014 prescribes “reasonable steps” as being an adherence to the Verification of Identity Standard set out in Schedule 8 to the NSW Participation Rules for Electronic Conveyancing.

Version 2 of the participation rules were determined on 29 August 2014 by the Registrar General pursuant to section 23 of the Electronic Conveyancing National Law (NSW) which draws its force from and is an appendix to Electronic Conveyancing (Adoption Of National Law) Act 2012 (NSW).

The rules adopted in Queensland, NSWVictoriaSouth Australia and Western Australia as part of the implementation of a national e-conveyancing system are near identical being based on the ARNECC model participation rules. 

The Verification of Identity Standard prescribes:

  1. A face-to-face in-person interview.
  2. The mortgagor must bear a “reasonable likeness” to the person depicted in photographs in the identification documents.
  3. The identification documents must be originals and be produced by the mortgagor.

The standard then prescribes the identity documents required in a cascading fashion. The Gold Standard being the possession of a passport and drivers licence. This obviating the need for anything else to be produced. Thereafter as less probative documents are produced more of them are required. Those presenting with a dearth of documentation are required to be accompanied to the face-to-face interview by an “Identity Declarant” who themselves must be indentified in accordance with the standard and in certain circumstances must be a member of specified professions.

The standard requires that the person identifying the mortgagor provide a certification in a prescribed form. It is also necessary for the lender to obtain a completed client authorisation form.

Victoria

Section 87A of the Transfer of Land Act 1958 (Vic) requires mortgagees to take reasonable steps to identify mortgagors or face cancellation of their mortgage.

Section 87B deems conformity with the steps prescribed by the VIC Participation Rules for Electronic Conveyancing as being reasonable. The Verification of Identity Standard is set out in Schedule 8 to the rules.

The rules adopted in Queensland, NSWVictoriaSouth Australia and Western Australia as part of the implementation of a national e-conveyancing system are near identical being based on the ARNECC model participation rules. 

The Verification of Identity Standard prescribes:

  1. A face-to-face in-person interview.
  2. The mortgagor must bear a “reasonable likeness” to the person depicted in photographs in the identification documents.
  3. The identification documents must be originals and be produced by the mortgagor.

The standard then prescribes the identity documents required in a cascading fashion. The Gold Standard being the possession of a passport and drivers licence. This obviating the need for anything else to be produced. Thereafter as less probative documents are produced more of them are required. Those presenting with a dearth of documentation are required to be accompanied to the face-to-face interview by an “Identity Declarant” who themselves must be indentified in accordance with the standard and in certain circumstances must be a member of specified professions.

The standard requires that the person identifying the mortgagor provide a certification in a prescribed form. It is also necessary for the lender to obtain a completed client authorisation form.

Tasmania

Tasmania has not prescribed a verification of identity standard however Bransgroves Lawyers recommends lenders and practitioners adopt the ARNECC Model Participation Rules – Version 2, 18 March 2014.

This standard requires:

  1. A face-to-face in-person interview.
  2. The mortgagor must bear a “reasonable likeness” to the person depicted in photographs in the identification documents.
  3. The identification documents must be originals and be produced by the mortgagor.

Bransgroves Lawyers also recommend that:

  1. the identification be conducted by the person witnessing the mortgagor’s execution of the mortgage. 
  2. an appointment of the person identifying and a certification of identification be obtained.

South Australia

South Australia has released the Registrar General’s Verification of Identity Policy.

This policy purports to bind mortgagees and solicitors, conveyancers and their agents, although there are no attached sanctions and no express legilsative underpinnings. The policy was issued under counsel’s advice that the power existed under s220 and 267 of the Real Property Act. However under the policy certifications must be lodged with paper dealings specifying that verifications has been done.

The rules adopted in Queensland, NSWVictoriaSouth Australia and Western Australia as part of the implementation of a national e-conveyancing system are near identical being based on the ARNECC model participation rules. 

The Verification of Identity Standard in the Participation Rules prescribes:

  1. A face-to-face in-person interview.
  2. The mortgagor must bear a “reasonable likeness” to the person depicted in photographs in the identification documents.
  3. The identification documents must be originals and be produced by the mortgagor.

The standard then prescribes the identity documents required in a cascading fashion. The Gold Standard being the possession of an Australian  passport and drivers licence. This obviating the need for anything else to be produced.

Thereafter as less probative documents are produced more of them are required. Those presenting with a dearth of documentation are required to be accompanied to the face-to-face interview by an “Identity Declarant” who themselves must be indentified in accordance with the standard.

For paper dealings, the person performing the identification must make a statement as to the verifications performed in the form of a statutory declaration or on letterhead addressed to the Registrar-General.

Western Australia

Paper conveyancing

The verification of identity standard for paper conveyancing is to be found in the Land Titles Registration Practice Manual edition 12.1 dated 5 December 2014 commencing at section 14.1 (page 499).

The standard is based on the model rules for verification of identity under the National Electronic Conveyancing program. The standard has two base requirements:

  1. The production of current, original identity documents from the prescribed categories; and
  2. Visual Verification of Identity:A visual “face to face” assessment of the identity documents and the person to whom they relate, comparing the photograph on the current original identity documents with the person being identified

Certifications must be lodged with paper dealings specifying that verifications have been done. These certifications are found at 14.4.7.4.

The standard prescribes the identity documents required in a cascading fashion. The Gold Standard being the possession of a passport and drivers licence. This obviating the need for anything else to be produced. Thereafter as less probative documents are produced more of them are required. Those presenting with a dearth of documentation are required to be accompanied to the face-to-face interview by an “Identity Declarant” who themselves must be indentified in accordance with the standard and in certain circumstances must be a member of specified professions.

The practice states (14.4.3):

Ideally, verification of identity should occur immediately prior to the execution of the document, so that the Identifier and witness, (if a witness is required), are the same person.

E-Conveyancing

Under sections 23 and 25 of the Electronic Conveyancing Act 2014, the Registrar of Land Titles determined and published the Participation Rules Version 2 dated 18 March 2014. The Verification of Identity Standard in the Participation Rules prescribe:

  1. A face-to-face in-person interview.
  2. The mortgagor must bear a “reasonable likeness” to the person depicted in photographs in the identification documents.
  3. The identification documents must be originals and be produced by the mortgagor.

The standard then prescribes the identity documents required in a cascading fashion. The Gold Standard [for Australian citizens or residents] being the possession of a[n Australian or foreign passport with resident visa] and drivers licence. This obviating the need for anything else to be produced. Thereafter as less probative documents are produced more of them are required. Those presenting with a dearth of documentation are required to be accompanied to the face-to-face interview by an “Identity Declarant” who themselves must be indentified in accordance with the standard and in certain circumstances must be a member of specified professions. [Foreign nationals must be identified using their foreign passport and some form of government issued identity document with a photograph and if the government issued identity document does not contain a photograph, a birth certificate must also be produced.] 

The rules adopted in Queensland, NSWVictoriaSouth Australia and Western Australia as part of the implementation of a national e-conveyancing system are near identical being based on the ARNECC model participation rules. 

Reconciling the two standards

Landgate issued Bulletin No. 257 | 17 November 2014 entitled VERIFICATION OF IDENTITY AND E-CONVEYANCING in which was written:

Some financial institutions have queried that the verification of identity regime, as outlined in the Participation Rules for electronic conveyancing, are different to WA VOI Practice – and as a result, they have to undertake verification of identity to different standards to meet both the e-conveyancing Participation Rules and WA VOI Practice.

This is not the case.

Both the Participation Rules and the WA VOI Practice adopt the ‘reasonable steps’ approach to verification of identity. If the verification of identity standard for e-conveyancing, as outlined in the Participation Rules, is met then the standard in the WA VOI Practice is also deemed to be met. This is because the standards are similar.

In applying VOI, the individual circumstances for each verification needs to be considered. As a consequence, the abovementioned standards are not the only ways to satisfy the reasonable steps requirement. The verifying person must take reasonable steps relevant to the specific circumstances in order to satisfy that requirement. However, if the verifying person complies with the standards, they will be deemed to have taken reasonable steps to verify the identity of the mortgagor/client.

Both standards require that the person identifying the mortgagor provide a certification in a prescribed form. It is also necessary for the lender to obtain a completed client authorisation form.

Northern Territory

The Northern Territory has not prescribed a verification of identity standard however Bransgroves Lawyers recommends lenders and practitioners adopt the ARNECC Model Participation Rules – Version 2, 18 March 2014.

This standard requires:

  1. A face-to-face in-person interview.
  2. The mortgagor must bear a “reasonable likeness” to the person depicted in photographs in the identification documents.
  3. The identification documents must be originals and be produced by the mortgagor.

Bransgroves Lawyers also recommend that:

  1. the identification be conducted by the person witnessing the mortgagor’s execution of the mortgage. 
  2. an appointment of the person identifying and a certification of identification be obtained.

Australian Capital Territory

The ACT has not prescribed a verification of identity standard however Bransgroves Lawyers recommends lenders and practitioners adopt the ARNECC Model Participation Rules – Version 2, 18 March 2014.

This standard requires:

  1. A face-to-face in-person interview.
  2. The mortgagor must bear a “reasonable likeness” to the person depicted in photographs in the identification documents.
  3. The identification documents must be originals and be produced by the mortgagor.

Bransgroves Lawyers also recommend that:

  1. the identification be conducted by the person witnessing the mortgagor’s execution of the mortgage. 
  2. an appointment of the person identifying and a certification of identification be obtained.

Any lenders requiring assistance in preparing their template documents for E-Conveyancing should contact Matthew Bransgrove.