Establishing the identity of your client is an essential safeguard against identity and property fraud in conveyancing transactions. The certifying practitioner is ultimately responsible for ensuring reasonable steps have been taken to verify the identity of the client.
Here’s what you need to know about practitioners’ certification obligations, and the basic requirements for verifying identity.
Practitioners' certification obligations
When lodging an electronic instrument, practitioners must certify they:
- have taken reasonable steps to verify the identity of the party, and
- hold evidence showing the truth of the above certification (regulation 7(3)(b) and (d) of the Land Transfer Regulations (the Regulations)).
Practitioners must retain that evidence and produce it if the dealing is selected for compliance review in accordance with section 30 of the Land Transfer Act 2017 (the Act).
Before making the above certifications, the requirements relating to client identity set out in the Authority and Identity Requirements for E-Dealing Standard 2018 - LINZS20018 (the Standard) must be satisfied. Sections 4 and 5 of the Authority and Identity Requirements for E-Dealing Guideline 2018 - LINZG20775 (the Guideline) has further guidance about how to satisfy those requirements.
Basic requirements for verifying identity
The following summarises the basic requirements for verifying identity.
The Standard sets safe harbour requirements which, if met, will satisfy practitioners certification obligations. To meet the safe harbour requirements, you must take reasonable steps and where necessary, seek further evidence and make further enquiries to verify the identity of your client.
The Standard sets out what those reasonable steps are and what further evidence (e.g. documents connecting the person to the property) will be required or enquiries must be made for both routine and high-risk transactions.
The Guideline provides further details about how to satisfy the safe harbour requirements, as well as alternative options for identity verification using equally effective means. If you adopt an equally effective means, you should record a file note of your decision to opt out of safe harbour along with an explanation and supporting evidence that demonstrates how the chosen means are effective.
Re-use of earlier identity verification in limited circumstances – section 18.104.22.168 of the Guideline
If for some reason your client is unable to produce their photo ID at the time you witness the signing of the A&I form and verify identity, you may be able to rely on an earlier identity verification procedure and related evidence. The circumstances in which you can do this are limited, and the guidance in section 22.214.171.124 of the Guideline should be followed.
Verification in the absence of any acceptable photo ID – section 4.1.2 of the Guideline
If your client does not have any form of acceptable photo ID, their identity may be verified by an independent witness aged 18 years or over in the form of a statutory declaration by the witness.
For more detail see sections 4.1.2 and 6 and the form of Declaration of Identity in Schedule 1 of the Guideline.
High-risk transactions – section 4.2 of the Guideline
Some transactions are considered high risk and require you to take additional steps to verify your client’s identity. Examples are provided in section 4.2.2 of the Guideline.
Record a file note of any additional actions taken, obtain a document connecting the client to the physical address of the property (see section 4.3 of the Guideline), and retain them both with the A&I form as evidence in support of your certifications under section 30(1) of the Act.
More detail about assessing what makes a transaction high risk is found in section 4.2 of the Guideline.
Reconciling name discrepancies – section 4.4 of the Guideline
Where your client’s name as it is recorded on the record of title differs from that on their photo ID, you should obtain additional evidence to reconcile the discrepancy and confirm that the owner is the person for whom the photo ID was issued, such as a marriage or name change certificate, and/or a statutory declaration.
Consideration may also be given as to whether an owner’s name on a record of title should be updated by applying to correct or change the name in the register. An application to correct or change a name is a high-risk transaction and the requirements set out in section 4.2 of the Guideline must be followed.
Further guidance on how to apply to correct or change a name can be found in the Applications to Correct or Change Names in the Register Guideline 2018 and supplementary webpage article linked below.
General witnessing criteria – section 4.5 of the Guideline
A witness to the execution of the A&I form must be aged 18 years or over and be independent of the client and transaction.
Delegating identity verification – section 4.6 of the Guideline
Where it’s not practicable to meet personally with your client to verify their identity, for example if they live in another part of NZ or are overseas, you may rely on a delegate to verify the client’s identity on your behalf. Table 1 in section 5 of the Guideline sets out both the safe harbour and equally effective means for suitable delegates within and outside of New Zealand.
When relying on a delegate, you should:
- record a file note explaining how the delegate is an independent trusted person whom you can reasonably rely on, and
- retain it with the A&I form as evidence in support of your certifications under section 30(1) of the Land Transfer Act 2017.
Using audio-visual technology in limited circumstances – section 4.7 of the Guideline
While witnessing in person is generally the preferred approach, the practitioner may use audio-visual technology such as Skype, FaceTime, WhatsApp and Zoom to verify identity if the conditions specified in section 4.7(a) to (c) of the Guideline are met.
Witnessing an A&I form involves not only verification of client identity but also of their legal capacity and bona fides. Further guidance on capacity can be found on the Authority to lodge e-dealings page.
Property Law Section Guidelines
Guideline L of the PLS Guidelines provides further guidance on client identity including the requirement to comply with rules 2.5 and 2.6 of Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008.
How do I verify the identity of my client if I am unable to meet in person due to COVID-19 restrictions?
We have published guidance to support you in times when you are unable to meet your clients in person due to COVID-19 restrictions.