Legal Services in a new dimension
Landgate Implements Tougher Measures to Mitigate Fraud
21/2/2018

People who deal with land in Western Australia are required to obtain a Verification of Identity (VOI) statement. To obtain a VOI, they must produce documentation and have their identities verified in person by an approved agent, such as a lawyer, conveyancer or Australia Post. Earlier this year, Landgate introduced changes to its VOI practice which extends this requirement to buyers and caveators. This ensures that errors and improper transactions are minimised, and aligns the paper-based transaction requirements with those of electronic-based transactions.  

WHAT IS A VOI?

The Western Australian Registrar of Titles and Commissioner of Titles require persons who deal with land to verify their identity. VOI is a two-step process which requires the production of current, original identification documents and then a visual face-to-face assessment of these, before lodging documents with Landgate.

Identifiers may be a conveyancer, lawyer, mortgagee or Australia Post may provide this service for self-represented parties for a fee.

On 31 January 2018, changes to the current VOI practice were announced, which seek to further improve the integrity of information in property transactions and reduce the risk of fraud. These changes come into effect on 12 February 2018, with full compliance expected by 5 June 2018.

BACKGROUND OF A VOI

In 2012, Landgate introduced a VOI practice to help mitigate fraudulent land transactions due to identity theft or other improper dealings. The changes were brought in response to a well-known title fraud in 2010; where a Roger Mildenhall had his Karrinyup home sold by Nigerian scammers, who obtained sufficient documentation (including utility bills) to authorise the transaction. The changes to the current VOI practice are aimed at reducing the risk of such fraud.

WHY THE CHANGE?

+ To reduce the risk of fraud

Indefeasibility of title is central to the Torrens system of land registration. Indefeasibility ensures that innocent third parties are protected in transactions. This protection is found in the Transfer of Land Act 1893 (WA) (TLA). Section 68 provides that when a person is registered on the certificate of title, their interest in that land is paramount. This remains true even if the true owner is deprived of their interest in the land through fraud. Section 63 of the TLA states that the Certificate of Title is held to be conclusive evidence that the person named has such power or interest as described in the certificate. This allows transferees to safely purchase property and they are not required to conduct inquiries beyond the certificate of title. For this reason, rigorous procedures are in place to ensure the rightful person is registered by Landgate.

+ To reduce the risk of successful claims for compensation against industry participants, and against the State under the TLA

Section 201(1) provides that compensation can be sought by any person who is deprived of their interest in land in consequence of fraud. As clarified in Parker v Registrar-General [1977] 1 NSWLR 22, the fraud must be by another who becomes registered. In the WA case of Registrar of Titles (WA) v Franzon (1975) 132 CLR 611, a solicitor forged the signatures of his client on a mortgage that was subsequently registered, however, there was no fraud under section 201(1) of the TLA because the solicitor himself did not become registered on the Certificate of Title. In cases of fraud or where there has been an error or misdescription, compensation can be claimed against the Registrar as a nominal defendant.

+ To align with the requirements for electronic transactions

This removes confusion for customers and agents operating in both the electronic and paper environments

WHAT ARE THE CHANGES?

The biggest change to the VOI practice includes requiring a VOI for buyers of land and caveators.

There are also significant changes for self-represented parties who must now have their VOI conducted at Australia Post with an increased cost. For sellers, mortgagors, donors for power of attorney, caveators, etc. the fee is now $159 and buyers who are newly required to obtain VOIs will be charged $89. This may result in changes to fees charged by solicitors for their services, to align with the service provided by Australia Post.  

The documentation required under the new changes largely remains the same so that a partys current VOI will be valid under the new practice from 5 June 2018.  However, the creation of a new category, Category 4, also accepts:

  1. Australian Passport or foreign passport plus another form of Australian State Government or Commonwealth Government issued photographic identity Document plus change of name or marriage certificate if necessary; and 
  2.  Australian Passport or foreign passport plus full birth certificate plus another form of Australian State Government or Commonwealth Government issued identity Document plus change of name or marriage certificate if necessary

MULTIPLE TRANSACTIONS OR MULTIPLE PROPERTIES

A VOI for each property and transaction is required.

HOW LONG DOES THE VOI LAST?

Where a person is represented by the same lawyer on a continuous or ongoing basis with respect to the sale of real property in Western Australia, a separate VOI is required on the first and second transfer but not for any subsequent transfers within the next two (2) years.

For self-represented parties, a VOI statement can be used for up to 2 years from the date of issue for the transaction and property specified. Subsequent transactions for the same or different properties require separate VOI statements.

If you are planning on conducting multiple transactions in the future, it may work be desirable to obtain services from a lawyer, because as noted above separate, a VOI is not required after the second transaction.

If you think these changes may affect you and need some advice, do not hesitate to call the Integra office for assistance.