Another reason for us to be vigilant
In our Winter 2015 newsletter we commented on “Potential Fraud Issues” and particularly “the need for photographic identification” for land transactions. All such property transactions are now dealt with by a process called “E-dealing” through Land Information New Zealand (“LINZ”).
Under the E-dealing Practice Guidelines and the Land Transfer Act 1952 we must do the following (once the sale and purchase agreement has been declared unconditional):
- Preparation of the Authority and Instruction form (i.e the Authority and Instruction form must be completed in its entirety with all the dates, names in full which match the names recorded on the certificate of title);
- Confirm the identity of the person before us by:
- Examining the authenticity of the government issued photographic identification (a New Zealand Driver’s Licence, a New Zealand Firearms Licence or a Passport are the most common acceptable forms of identification);
- Checking the photograph identification is current;
- Checking the photograph identification is a reasonable likeness of a person before them; and
- Checking the signature on the photograph identification matches that on the Authority and Instruction forms.
- Where the client’s name as registered on the certificate of title differs from that shown on their photograph identification the discrepancy must be reconciled by having the client make a statutory declaration;
- If the client does not have current photographic identification then we must consider alternative means of verification;
- In most cases where a client is transferring or mortgaging a property, we must also be provided with documentation linking the landowner’s name and the physical address of the property, such as a Rates demand, Bank Statement or Utility account.
- Some transactions are deemed to be “High risk” by LINZ (for example, the transfer or mortgaging of unencumbered land) which impose additional obligations on us to verify the identity of the client; and
- The e-dealing/instruments cannot be certified/signed as true and correct until the Authority and Instruction form has been signed by the client and identification has been verified by us.
As you can see the process is very comprehensive. In the past some clients have considered the above requirements unnecessary and bothersome but nevertheless we need to be vigilant at all stages of property transactions to protect the clients and comply with our legal obligations.