Archive for the ‘News – Buying and Selling Property’ Category

Verification of Identity in property transactions

Verification of Identity (VOI) is a process used to confirm the identity of a person.

Lawyers and other parties involved in property transactions have an obligation to ensure that the person claiming authority to deal with land is legally permitted to do so.  This includes confirming a person’s capacity to act as agent for a company or as an attorney.

The VOI process is particularly important in land and property dealings as it assists in reducing identity theft and land title fraud.  Verification of Identity has always formed part of good practice however from 1 August 2016 it became mandatory for land transactions.

Lawyers and other parties must take ‘reasonable steps’ to verify the identity of their clients, their client’s agents and persons to whom title deeds are being provided.

This means that your Lawyer will need to formally verify your identity during a face to face interview or use other approved methods to confirm your identity and authority to enter into the contemplated transaction.  The VOI requirements extend to any person authorised to act on behalf of the client.

When do I need to prove my identity?

Land and Property Information (LPI) is the central registration authority for real property (land) dealings in New South Wales.  The LPI registers hundreds of transactions affecting land every week.

New provisions under the Real Property Act 1900 (NSW) allow the Registrar-General to make rules (Conveyancing Rules) regarding the verification and identity of particular classes of persons with respect to certain transactions (Conveyancing Transactions).

The Conveyancing Rules set out the framework required for VOI processes which also reflect the methods used by recently-introduced electronic conveyancing procedures.

Broadly, a Conveyancing Transaction is a transaction between one or more parties involving the creation, disposal or transfer of an interest in land.  A typical conveyance, mortgage, charge or lease over property falls within this category.

The registration, recording or removal of an interest or notation in the titles register are also Conveyancing Transactions and will be subject to VOI processes.  Examples include the registration of an easement, caveat or plan of subdivision.

The VOI process must also be used for documents that do not require registration at LPI (such as a contract for sale and purchase of land and agreement for lease).

How does the VOI process work?

Your Lawyer must be satisfied that he / she is dealing with the person claiming to be authorised to enter transactions regarding the property.  Likewise, Lawyers acting for the party on the other side to your property transaction must confirm the identity of their client.  The idea is to create an ‘even playing field’ in the conveyancing and property transaction setting.  By ensuring all sides to a transaction undertake diligent VOI measures the parties are better protected against property fraud.

If you are involved in a property transaction such as the sale or purchase of land or borrowing money secured by a mortgage, you will need to meet personally with your Lawyer or other agency to provide documents and formally prove your identity.

During the VOI process you will be asked to produce original documents so that your identity can be compared (ideally) with a document containing photo identification.

The documentation required for the VOI process is similar to the present ‘100 points’ system commonly used for banking and other identification processes.  There are various categories and combinations of documents which may be used to prove your identity.  These include an Australian or foreign passport, drivers licence or photo card, birth or citizenship certificate, Medicare, Centrelink or Department of Veterans’ Affairs card.  For those persons who are not Australian citizens or residents, other types of documents may be used.

The types of documents you need to produce are categorised with the higher category documents being the preferred VOI source, for example an Australian passport and driver’s licence.

If sufficient identification documents are not available, an Identifier Declaration may be used which enables another person to identify you.  Your Lawyer can advise you on this process.

Verification of Identity documentation relating to a property transaction must be kept securely by your Lawyer for seven years.  Once the VOI process is carried out, further verification need not take place for two years.  This means that you need not undertake a further VOI process for a subsequent property transaction that occurs within two years of the initial VOI.


 

What if I cannot visit my Lawyer?

If you are unable to attend a face to face interview with your Lawyer, an Identity Agent can be used to confirm your identity.  This is practical for clients who are travelling or do not reside close to their Lawyer’s office.

Australia Post and other reputable agents offer this service and your Lawyer can refer you accordingly.  The Identity Agent will complete the VOI process in a similar manner as required by your Lawyer and provide an Identity Agent Certification.

What about companies and attorneys?

If a party involved in a Conveyancing Transaction is a corporate entity, a company search will be obtained to confirm the existence of the company and to establish those persons authorised to sign on behalf of the company.  The authorised representatives will then need to undergo the VOI process.

Similarly, attorneys entering transactions on behalf of their principal must provide the document authorising such a transaction and complete the VOI process to verify their identity.

Conclusion

Identity theft leading to the registration of fraudulent documents and dealings over land is not a new phenomenon and can have devastating financial and other affects.  Verification of Identity is an important safeguard against fraud and is an essential risk management tool.

By imposing standard and reciprocal requirements for Lawyers and Conveyancers to identify their clients, mandatory VOI rules are likely to offer better protection and safeguard you against a possible fraud in connection with your property transaction.

For more information about VOI, talk to one of our experienced Property Lawyers or if someone you know wants more information or needs help or advice, please contact us on 02 6372 3388 or email richard@richardwisesolicitor.com.au.

Swimming Pools – new compliance laws

Across the country, thousands of homes have backyard swimming pools. With drowning being a leading cause of preventable death in young children, swimming pool safety is an important issue for the community.

New compliance laws came into effect in NSW in April 2016, requiring that any property with a swimming pool now needs a certificate of compliance before it can be sold or leased. Similar requirements are already in place in Queensland.

 

New laws for properties with swimming pools

The new laws are a result of an amendment to the Swimming Pools Act 1992 which took place in 2012. They provide that:

  • swimming pool owners must register their swimming pool or spa pool on the NSW Swimming Pool Register; and
  • from 29 April 2016, a copy of a certificate of compliance or relevant occupation certificate must be attached to the sale contract or new residential tenancy agreement to sell or rent any property with a swimming pool or spa pool.

For the purposes of the provisions, swimming pools or spa pools are defined as structures that are:

  • capable of being filled with water to a depth of greater than 300mm; and
  • solely, or principally used, designed, manufactured or adapted for the purposes of swimming, wading, paddling or other aquatic activity.

The new laws apply to a number of properties including private houses, units, hotels, motels and other tourist and visitor accommodation. For units, the owner’s corporation must obtain the compliance certificate. Individual lot owners can then inspect the certificate through the Swimming Pool Register website.

 

Swimming pool certificate of compliance

A swimming pool certificate of compliance is a document which confirms that the pool and pool barrier meet safety requirements.

An occupation certificate that is less than 3 years old and that authorises the use of the swimming pool can be used instead of a certificate of compliance. A certificate of compliance is valid for a period of 3 years from the date of issue.

Local councils and accredited certifiers can carry out a swimming pool barrier inspection and issue a certificate of compliance.

 

Contracts for sale of land

A valid swimming pool certificate of compliance, or a valid certificate of non- compliance, must be attached to the contract of sale of properties with a swimming pool or spa pool.

This requirement does not apply:

  • to a lot in strata or community schemes with more than two lots, or
  • for any off-the-plan contract.

Failure to attach a certificate or relevant occupation certificate will allow a purchaser to rescind the contract at any time within 14 days of exchange of contracts, unless settlement has already occurred. However, vendors are able to shift the responsibility of obtaining a certificate of compliance by attaching a certificate of non-compliance.

Should the purchaser complete the sale with a certificate of non-compliance attached to the contract, the purchaser will have 90 days from settlement to fix the non-compliance issues.

 

Conclusion

As an owner of a pool you may request your local council or private certifier to carry out an inspection in order to obtain a certificate of compliance. This must be done by the authority within 10 business days if the purpose is to sell or lease the land.

It is too early know the implications of the new requirements however it may affect your property’s value should the cost of fixing a non-complying pool be deemed excessive by a prospective purchaser. Or, it may even affect your ability to rent a house you own which has a pool as part of the rental agreement.

If you own a property that has a swimming pool consideration should be given to arranging a swimming pool inspection and obtaining a certificate of compliance even if a sale is not planned for some time.

If you or someone you know wants more information or needs help or advice, please contact us on 02 6372 3388 or email richard@richardwisesolicitor.com.au.

 

Traps to Avoid when buying a Property – pre contract inspections

Traps to Avoid when buying a Property – pre contract inspections

 

Buying a home is the biggest investment or financial outlay that most of us will make in a lifetime. It is critical to your financial future that you make well-informed decisions when you purchase a property, whether it be for your own home or an investment.

The Contract for Sale of Land basically follows the common law of “caveat emptor”– let the buyer beware. This means that the purchaser must make their own enquiries and investigate the quality of the improvements on the property before they enter into a contract to buy that property.

A vendor or seller of the property is not allowed to deliberately hide defects or deceive the buyer by fraud but the purchaser should undertake searches and inspections of the property to discover any defects in the property. Failure to do this may result in the buyer losing their deposit and being sued by the seller for breach of contract, or the buyer can end up with a property that needs expensive repairs.

 

Pre-contract inspections

There are various inspections that a purchaser should get done prior to entering into a contract to buy a property. The number of inspections and searches depend on the location and type of property you are purchasing, the inspections may be different for a residential house in town, a strata unit, vacant land, rural property or industrial property.

In this article we shall look at pre-contract inspections for a standard residential house.

 

Timber Pest Inspection

In locations which are susceptible to pest infestation a qualified and insured pest inspector will conduct a visual inspection of the property to discover if there is any termite or other pest activity at present or in the past.

More detailed inspection such as thermal imaging or photographs of the walls and bathrooms to highlight any damp areas that should not be present may also be conducted if required. The inspector will also conduct a moisture meter reading of the bathrooms and other wet areas as termites are attracted by damp timber. They will also examine the property for any wood decay, borers or rot that will affect the structure of the home.

Termite damage undiscovered can not only increase but can cost many thousands of dollars to repair. Sometimes if the damage is really bad that part of the house might have to be demolished and rebuilt wreaking damage on your investment.

 

Building Inspections

A qualified and insured building inspector should be commissioned to inspect the property including the house, any garage or other buildings located on the property.

The Inspector will investigate the interior and exterior of the buildings including the most costly items to repair being the roof, kitchen and bathroom/s, looking for any defects that are not usual “wear and tear”.

In an existing home there are usually small defects which accumulate over time due to use and are readily visible but it is the not so visible defects that are costly like a leaking roof that can cost tens of thousands of dollars to repair.

If the inspection reports show issues of concern, other specialist tradesmen may be required to check specific areas or issues.

 

Plumbing and Electrical

A licensed plumber may be required to inspect drainage issues.

If the property has a septic waste system that is not connected to the town sewerage supply, a plumber’s report should be obtained as a new septic system can cost $10,000+ to install plus excavation works in trenching a faulty system.

If there is any indication that electrical wiring may be faulty or the house is very old, an electrician may be requested to evaluate the property.

 

Pools and spas

If the property includes a pool or a spa then the pump and any ancillary equipment as well as the pool or spa itself should be investigated to ensure good working order.

 

Council records

It may be necessary to make application to the local Council for a copy of the building records for the property which will include any development applications (DA), building site records and floor plans.

The DA for the original dwelling house and other buildings should be carefully matched to the existing structure to make sure that the plans approved by council have been complied with. If an owner builds structures on a property that require council approval and the owner builds without an approved DA, the council can lodge a demolition order against the property or require it to be approved as “continuing use” after payment of hefty fees to council.

Structures such as decks, large sheds, pools and pergolas can also fall into this category.

Building Certificate

If there are unapproved structures on the property you should consider obtaining a building certificate to ensure that council will not look to you after the sale to demolish, rectify or obtain approvals.

 

Survey

A survey shows the dimensions and boundaries of the property. It will also identify any encroachments by structures erected on the land.

In areas inhabited for a long time the fences are often not right on the boundary or there may actually be part of a building encroaching on your land. In more extreme cases, a driveway which appears to be on the property you are buying may actually be on the next door neighbour’s property which would mean you may end up with no access to your new home.

 

Strata

If you are purchasing a strata property then a full examination of the strata management records should be undertaken by an experienced person. The strata records will show not only the financial details of the administrative and sinking funds but will also show plumbing, drainage, fencing, driveway and other problems that may exist or which have been repaired in the past. Any proposal for additional works or levies should be identified via a strata inspection.

 

A penny saved is a penny earned

Your lawyer can advise you of the pre-contract inspections which should be carried out for each property. Not doing pre-contract inspections before you buy a property is not only risky but it is also false economy. Considering that the cost of a building and pest inspection for an average house costs about $500-$650 the outlay represents about 0.15% of the purchase price of an average home!

The traps when buying a property are easily avoidable and the risk far outweighs the cost of proper and diligent investigation before you buy.

If you or someone you know wants more information or needs help or advice, please contact us on 02 6372 3388 or email richard@richardwisesolicitor.com.au.