Is Your Dealing Authorised?

/ / Information, Law

For all electronic dealings, a Client Authorisation is now required to authorise a conveyancer to act as their client’s agent and to sign conveyancing transactions on their client’s behalf.

Client Authorisations 2018: A Health-Check

The cut-off dates for mandatory electronic lodgements of conveyancing transactions in NSW are fast approaching. Furthermore, Client Authorisations are becoming a fundamental requirement of every conveyancer’s discharge of their professional duties to their clients, the Registry, and their professional indemnity insurers.

For all electronic dealings, a Client Authorisation is now required to authorise a conveyancer to act as their client’s agent and to sign conveyancing transactions on their client’s behalf. Correctly completed and fully signed Client Authorisations must already be held on file for all PEXA transactions. Any departures from this practice expose a firm to the risk of liability for unauthorised dealings on the Register. Implications under the firm’s professional indemnity policy may also need to be considered in the event of a claim.

During the transition to industry-wide electronic conveyancing in NSW, ZipID has discovered—through extensive discussions with Registry staff, AICNSW members, and professional indemnity insurers—a number of common pitfalls and misunderstandings about authorised dealings.

The following six key practice tips are a quick health-check for your firm’s Client Authorisation policies and procedures.

Tip 1: Guiding your client

When advising a client of their VOI options—including whether to attend your office or to use an Identity Agent—it is recommended that firms clearly instruct their clients to bring their Client Authorisation with them for signing at the VOI meeting itself.

Many firms are now removing VOI and Client Authorisations from their first letters and combining them separately with the aim of making it immediately obvious that clients should action these two items in tandem.

Ideally, the verification of identity of the client would be completed at the time the client signs the Client Authorisation

ARNECC MPR Guidance Note #1 – Client Authorisation

Tip 2: Linking proof of signing to VOI

The certification at the bottom of the Client Authorisation should be signed by either:

  1. the conveyancer, if they complete the client VOI (to avoid the risk of professional misconduct by providing a false certification, it is essential that this certification is based on facts reasonably known to the conveyancer), or
  2. an Identity Agent who completes the client VOI for the conveyancer (when the Client Authorisation is collected, signed and returned by an Identity Agent together with the VOI evidence, the conveyancer does not also need to sign the Client Authorisation).

Tip 3: Capacity of the signatory

A firm’s client is often a different legal entity to the natural person who signs the Client Authorisation.

A common example is one in which the client is a proprietary limited company and the signatory is a Sole Director. In such instances, the signatory’s capacity as Sole Director should be inserted on the Client Authorisation and a VOI should be conducted only if the signatory is not already reliably known to the firm.

Tip 4: Your firm must always be named

A Client Authorisation evidences a legal relationship between a client and a firm that enables binding dealings to be lodged by that firm on the Register.

To be valid, the Client Authorisation must always contain the conveyancing firm’s details. It is a misunderstanding for conveyancers to think that their firm’s details need not appear in cases where a Client Authorisation will be co-signed by an Identity Agent.

Tip 5: Use of Standing Authorities

A Client Authorisation must be correctly filled out before the client signs it in order to designate:

the specific conveyancing transaction, i.e. the real property address,
a revocable standing authority, or
a batch of transactions.

For a standing authority, it remains necessary to nominate (using the form’s tick boxes) which type/s of conveyancing transaction the authority relates to.

Tip 6: Retention of a signed copy

A copy of the fully-signed Client Authorisation must be retained for seven (7) years. The MPR Guidance Note #1 – Client Authorisation (Updated)—available on the ARNECC website—confirms that an electronic copy, such as a PDF, can be retained without the need to retain the wet-inked original on file.

It is a misunderstanding for conveyancers to think that they must always retain a fully-signed paper original.

REMINDER: A fully-signed Client Authorisation is included with every ZipID VOI Report (PDF) completed for firms who instruct ZipID to collect and sign Client Authorisations at VOI appointments.

This article was written by Sean Simmons, Lawyer and Head of ZipID