Property fraud has devastating effects for homeowners and real estate professionals, so this year has seen the introduction of some thorough new laws for identifying property sellers.
In the following article, I’ll outline the details of the new system and explain what the changes will mean for sellers and real estate agents.
VOI in a nutshell
As of the 2nd January 2013, the West Australian Land Titles Office have placed strict requirements on settlement agents, lawyers and mortgagees with the introduction of The Western Australian Registrar and Commissioner of Titles Joint Practice: Verification of Identity (VOI). VOI has been put in place with the intention of reducing and better managing the risk of fraud in Western Australian property transactions.
It sets out the minimum requirements for identifying a seller or seller’s agent (ie. someone acting under a Power of Attorney) when dealing with property transactions, or a buyer when lodging a mortgage over a property.
Previously we have been required to obtain a minimum of 100 point of ID for each seller – but this is no longer the case. The standards have been raised and are now based on two requirements:
- Identity Document Production: production of original and valid identity documents from one of five pre-set categories, and
- Visual Verification of Identity: a visual ‘face to face’ comparison of the photograph on the identity documents to the client.
How VOI works
When the VOI is performed in Australia (as is the case in most of our settlements), the settlement agent, lawyer or mortgagee can choose to perform the VOI themselves, or they can appoint an agent to complete the process on their behalf. At Residential Settlements our clients have two options:
- Attend our office during business hours to have their VOI completed – at this stage we do not charge any additional fees for this service, or
- Attend a participating branch of Australia Post to have their VOI completed – Australia Post charge $39 per person for this service.
If clients choose to attend an Australia post outlet, they must take their relevant ID documents along with a Land Title Identity Verification form obtained from our office (each settlement agent, lawyer or mortgagee has forms with their own unique barcode). Australia Post will copy and certify their ID documents and take a current photo of the clients.
Australia Post forward this directly to our office (it is not given back to the client to send).
The following documents require VOI to be completed:
These are the five categories of identification documents accepted:
VOI must occur immediately prior to the execution of the required document (such as a Transfer of Land). As the most common document we deal with in a settlement that requires VOI to be completed is the Transfer of Land, our current procedure is to send out instructions with the Transfer on how to complete their VOI requirements.
To ensure clients have sufficient time to locate their correct ID documents, we also advise our clients of the requirements in our initial telephone conversation.
If we represent a client on an ongoing basis or they complete one or more transactions in a two year period (commencing from their first transaction), they are only required to complete VOI on the first two transactions.
If the seller is a Company, Incorporated Body or Statutory Body, VOI must be conducted on the person(s) authorised to sign, and they must also provide evidence (not more than 30 days old) that they are authorised.
If the seller is representing themselves, they must have VOI completed by a person nominated by Landgate. For a list of authorised agents, visit www.landgate.wa.gov.au.
If a client is overseas, the verification process remains the same as previous. They are to attend an Australian Consular Office and have a copy of their passport, drivers license and current Shire rates notice verified.
One of the main differences from previous requirements is that all settlement agents, lawyers and mortgagees must now submit a statement on company letterhead at the time of settlement confirming that we believe that VOI has been completed on each client and that they have authority to deal with the property. This is a big risk for the settlement agent, lawyer or mortgagee as fake ID documents are now readily obtained and sometimes are hard to tell apart for genuine documents. Landgate will not accept lodgement of documents without this statement.
With the risk of fake ID being a reality, our staff also ensure they ask appropriate questions of Sellers that only a true owner would know the answers to. By trusting our instincts rather than solely relying on ID documents we add an additional level of security against property fraud.
We are required to keep all completed VOI for 7 years in a secure place. We do not release the VOI to anyone except Landgate if they formally request it in relation to the dealing.
What VOI means for you
Real estate agents are not required to carry out VOI, although they are still required to follow the procedures set by their office in relation to completing a 100 point ID check at the time of listing a property.
Many sellers, however, begin the settlement process unprepared to complete the VOI process.
If you’re a real estate agent, talk to your client about the new procedures at the time of listing, and advise them that they will be required to present ID documents from one the five categories at the time of a signing a Transfer.
If you’re a seller, ensure you confirm the location of your identity documents when you list your property for sale. If you don’t have identity documents, apply for them early, before the settlement process has begun.
By doing so, you can help maximise the likelihood of a smooth and hassle-free settlement.
Find out more about the new procedures at Landgate’s website.
Image by Rainbowhill LL via Flickr.