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Client Authorisations: MythBusters Q&A

Fran: Many WA Conveyancers have started using Client Authorisations in preparation for mandatory electronic settlements. Is this simply ‘business as usual’ in WA now?

Sean: We’ve been out speaking to a wide range of firms and to Land Registry staff in the States where compliance audits have now commenced. We wanted to understand and help master the practical application of Client Authorisation procedures in detail. We’ve learned that there are still some important gaps in understanding and that some common pain points are arising.

Fran: What are the major myths or misunderstandings you’ve encountered?

Sean: Two things stand out most. One is a belief by some firms that they must retain an original wet inked signed Client Authorisation. The official guidance (MPR Guidance Note #1 – Client Authorisations (Updated) available on the ARNECC website) clarifies that retaining an electronic signed copy (e.g. a PDF) of the Client Authorisation is sufficient to satisfy the 7 year record retention. This is great news for WA firms going paperless. Some WA firms are also not fully aware of the policy reasons underpinning compliant Client Authorisation procedures. The Guidance states that ‘ideally’ VOI should occur at the same time the client signs the Client Authorisation. If these related processes are separated in a firm’s workflow the firm needs to have some reasonable proof that the person who signed the CA is in fact the client (or client representative) as may be established by VOI.

Fran: What have you learned from Land Registry audits in other States?

Sean: In South Australia and Victoria Client Authorisations are mandatory for all dealings, paper or electronic. In NSW Client Authorisation audits have also started for electronic dealings. Generally, compliance is being consistently achieved. Areas for improvement coming out of the audits include:

  • Checking the correct entity name of non-individual clients and ensuring the capacity of the person/s signing for the client is filled in correctly.
  • When Standing Authorities are used, as is often being done for developer clients, it’s important to ensure that a separate CA is held for each entity where the developer has multiple entities.
  • In all instances the type/s of authorised dealings must also be ticked on the CA and the CA must be correctly dated.

Most firms are using the standard A4 version of the CA with the details and signatures contained on one page.

Fran: Are any WA firms doing things differently that is working well for them?

Sean: There’s no ‘one size fits all’ to conveyancing practice. That said, no Conveyancer likes having to chase clients for VOI or a signed Client Authorisation. An insight some firms have shared with us is that they’re successfully getting prompt client attention by separating the VOI and CA client instructions from their engagement letters. Separating out these immediate tasks for the client helps get their urgent action to these key steps.

Fran: What are the key new risks to WA Conveyancers arising from Client Authorisations?

Sean: Holding a properly completed Client Authorisation for every file that is settled electronically is crucial to establishing a Conveyancer’s legal authority to execute the transaction on behalf of the client.

There may also be claims and excess implications under a firm’s insurance policy if a correct Client Authorisation is not held on file. The certification at the bottom of the Client Authorisation signed by the Conveyancer or VOI Agent (e.g. ZipID) linking the signing of the Client Authorisation to an identified person must be based on reliable facts. The safest way to achieve this is to combine both steps (i.e. VOI and Client Authorisation signing) in one process.

Fran: How is ZipID supporting Client Authorisations for AICWA Members?

Sean: The ZipID mobile app and agency service both include a guided step for Client Authorisation collection and secure storage as part of the VOI Report.

For firms using the ZipID agency service wanting to combine VOI with the Client Authorisation we now give the client a reminder email and SMS in preparation for their VOI meeting. This ensures they bring and sign the Client Authorisation in front of our representative. We provide a Service Guarantee to all our Conveyancing partners that if they’re not satisfied with the VOI and Client Authorisation returned by us due to any fault on our part we’ll redo the job with the client for free.

Fran: Thanks Sean for sharing these insights and updates with AICWA Members.

Sean: Thanks Fran and thanks to AICWA and all our WA referral firms for your great support of ZipID.

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