Client Authorisations have recently been identified by ARNECC as an area with a high proportion of practitioner non-compliance in the industry. Given the impact that nonconformity with the regulations can have, we thought some helpful reminders might be useful.
Why are Client Authorisations so important?
Client Authorisations are an integral part of the e-conveyancing process and have been introduced to help practitioners protect the integrity of the register.
The Client Authorisation protects firms from the risk of liability for unauthorized dealings on the register and therefore holding a properly completed Client Authorisation for every file is crucial.
There can also be claims and other implications under a firm’s professional indemnity insurance and in some cases the registry can remove a firm’s ability to transact electronically if a properly completed Client Authorisation is not held.
Common issues with Client Authorisations
The most common issues found on a recurring basis by ARNECC include:
- A Client Authorisation has not been signed and/or dated by the client and/or the practitioner
- A Subscriber is not using the current prescribed version of the Client Authorisation form
- The Client Authorisation form does not record the correct details of the client or the transaction, this includes such things as the full legal name of the client, the title reference, the transaction type, or the authority type
How can I ensure I remain compliant?
To assist you meet your obligations under the Model Participation Rules regarding Client Authorisation and avoid non-compliance, here are some tips for avoiding the common issues.
- The Client Authorisation has not been signed and/or dated by the client and/or the practitioner.
Create a process to ensure that every Client Authorisation has been properly signed and dated by all your clients or their agents. Ideally, this would be done at the same time as the practitioner verifies the client’s identity. In some cases, your client may be a different legal entity to the person who is signing the Client Authorisation. When being signed by a Client Agent, the capacity (e.g. an attorney or a director of a company) must always be shown and evidence is required of that authority, such as the power of attorney document.
In terms of who needs to also sign and date the Client Authorisation:
- If the Client Authorisation is signed by a Representative Agent (example: Australia Post)
The practitioner does not need to sign the Client Authorisation as well.
Check that the Representative Agent has written their name and the date in the panel under the Client signature.
Note: An Identity Agent, who conducts the VOI, should not sign as Representative Agent unless they have been appointed as the Representative Agent. If unsure, it is recommended that you read your agreement.
- If the Client Authorisation is witnessed by an Australian Consular Office officer
The Australian Consular Office officer also writes their name and the date in the panel under the Client signature.
- The authority type on the form is either not selected, or incorrectly selected.
You should make sure the correct authority type in the ‘Transaction Details’ panel is selected, here’s a list of the available options and when they should be selected:
- Specific Authority
Select this when the Client authorises you to act in a specific Conveyancing Transaction. The Property Address and Land Title Reference(s) fields must also be completed, together with ticking the categories of Conveyancing Transactions.
- Standing Authority
Select this when the Client authorises you to act for a set period. The timeframe is set out in the Client Authorisation, either until a specified expiration date, or until the Client Authorisation is revoked by the Client. The categories of Conveyancing Transactions must be ticked.
- Batch Authority
Select this when the Client authorises you to act in a batch of Conveyancing Transactions, such as development sites. Details of the Conveyancing Transactions the Batch Authority is intended to cover should be attached.
- Specific Authority
ARNECC have some helpful information and guides available to assist you to perform your duties. Guidance Note #1 – Client Authorisation and Guidance Note #6 – Compliance Examinations available at https://www.arnecc.gov.au/publications/mpr_guidance_notes.