During 2019, the Australian Registrars’ National Electronic Conveyancing Council (ARNECC) consulted on proposed changes to the rules governing electronic conveyancing in Australia – referred to as the Model Participation Rules (MPR) and the Model Operating Requirements (MOR).
One aspect of the proposed changes to the MRP that caused great consternation amongst practitioners was the proposal to require everyone to adopt the verification of identity standard (VOI Standard) when identifying parties to a conveyancing transaction and remove the option for Subscribers (lenders, lawyers and conveyancers) to verify identity by taking “reasonable steps”.
Strong representations were made by industry with regard to this proposed change, especially lenders who generally have their own processes to verify identity, often electronically and incorporating Anti-Money Laundering (AML) requirements at the same time.
The release by ARNECC on 9 October 2020 of a further consultation draft on the proposed changes makes it clear that ARNECC has abandoned that proposal.
The net effect is that the status quo prevails and Subscribers can verify identity either:
- by applying the VOI Standard, or
- in some other way that constitutes the taking of reasonable steps.
Of course, persons who are identity agents such as Australia Post and Zip ID will still have to verify in accordance with the VOI Standard – as they do currently. Identity agents will not apply the reasonable steps standard as what would be “reasonable” depends on the particular circumstances. Identity agents are not in a position to be able to make this assessment due to their lack of knowledge of the person being identified.
The other proposed changes to the MPR and MOR are generally not contentious, although will involve a change to the client authorisation form that is required to be completed by the client in order to authorise Subscribers to sign and transact on electronic conveyancing platforms such as Property Exchange Australia (PEXA).
The consultation period on the draft MPR and MOR closes on 6 November. It is proposed that the changes will take effect from March 2021.