Mortgagees may use reasonable steps or safe harbour procedures to identify mortgagors in all jurisdictions for both paper and PEXA mortgages.

ARNECC Participation Rules – version 3

  1. VOI is required for all PEXA dealings as specified in Model Participation Rules version 3 - clean.  
  2. Mortgagees must take ‘reasonable steps’ to identify mortgagors.   
  3. If a Subscriber (such as a panel lawyer) is lodging mortgages on behalf of mortgagees, the Subscriber must be reasonably satisfied that the mortgagee has taken reasonable steps to verify the identity of each mortgagor – cl 6.5.1(b).  As a result, Subscribers will need to ask mortgagees what steps are taken.  This enquiry can relate to the procedure used by mortgagees as distinct from asking for details of the steps taken on a case by case basis.  
  4. The rules prescribe a ‘safe harbour’ procedure that can be used called the ‘Verification of Identity Standard’ – cl 6.5.2.  This standard requires the mortgagee or an approved ‘Identity Verifier’ (such as lawyers and finance brokers) to conduct a face-to-face interview.  If documents containing photographs are produced, the mortgagee or Identity Verifier must be satisfied that the person being identified is a reasonable likeness to the person in the photographs – Schedule 9.  
  5. Commentary emphasises that mere mechanical compliance is insufficient.  Accordingly, irrespective of whether safe harbour or some other procedures are adopted, mortgagees should take additional steps if any inconsistencies are identified.   
  6. Because often mortgagees will not know whether a mortgage will be registered through PEXA or paper, mortgagees normally also need to comply with the rules for paper dealings.  It is therefore good news that paper and PEXA processes should be aligned from May 2016.  
  7. There is no safe harbour prescribed for VOIs conducted overseas.  However, ARNECC and the Department of Foreign Affairs and Trade (DFAT) have developed a new arrangement to assist. The VOI service will be provided by an Australian Embassy, High Commission or Consulate see MPR Guidance Note #2 available at MPR Guidance Note #2 – Verification of Identity (Updated) .  The service can be used for both electronic and paper conveyancing


  1. VOI for paper dealings applies only to mortgages over land in NSW and Qld.   VOI for paper dealings applies to most dealings for land located in WA, SA, and Vic.  VOI has not been prescribed in ACT, Tas, or NT.  
  2. Evidence supporting the VOI must be retained for seven years from the date of lodgement of the mortgage.  
  3. WA and SA require a certificate concerning VOI to be lodged with paper mortgages.   This certificate can be signed by the mortgagee or the lodging party acting for the mortgagee.  (A certificate is required for all PEXA dealings).  
  4. In Vic, mortgages lodged through PEXA are void if the mortgagee ceases to retain a copy of the mortgage signed by the mortgagor – s 74(3) Transfer of Land Act 1958.  The copy can be retained electronically.  PEXA mortgages can also be signed electronically.  
  5. Mortgagees who title insure should ensure that their insurer’s cover will apply given the process used for VOI.

Reasonable steps

Despite the small differences between jurisdictions prior to May 2016 when version 3 should be uniform, all jurisdictions currently allow mortgagees to take reasonable steps to identify mortgagors.  This allows mortgagees to adopt national uniform procedures to conduct VOI even in jurisdictions which do not mandate VOI.

This raises the question of what constitutes reasonable steps.  It may often be the case that the identity of the customer can be verified in ways other than following safe harbour.  From a mortgagee’s perspective this is to a certain extent a risk assessment, as the main consequence of a finding that the steps taken were not reasonable will be that the relevant mortgage will be set aside if there is identity fraud.


Participating jurisdictions (Qld, NSW, Vic, SA, and WA) are all moving towards ‘alignment’ with Victoria currently the most advanced.  Under alignment, PEXA processes are used even if lodgement is by paper.  For example, instead of lodging a paper mortgage, mortgagees will lodge a certificate stating that a signed mortgage is held. 

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