Australian Institute of Conveyancers (NSW Division) - Australian Institute of ...
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Australian Institute of Conveyancers
(NSW Division)
RISK MANAGEMENT SELF-ASSESSMENTS
Introduction and the Risk Management Program:
The Australian Institute of Conveyancers NSW Division (the Institute) first introduced the Risk
Management Program in the year 2000. At the time, it was introduced as a tool to assist members in the
running of their files and practice to reduce the stresses of day-to-day file and business management and
to help reduce the likelihood of a professional indemnity claim.
The program was updated in 2005 and made mandatory for all Business Owner Members wishing to
receive the Institute’s member discount on the PI insurance policy. Originally, the program required a
mandatory annual inspection of the participating member’s business. By 2010, the membership had
increased to the point where mandatory annual physical inspections were no longer possible and the
program was changed to allow for a mandatory annual online self-assessment together with random
physical inspections.
To meet the requirements of the program, a business owner member must be able to show:
• a reasonable knowledge of risk management procedures (as evidenced by the annual online self-
assessment and any physical assessment conducted on the conveyancer’s business),
• that a risk management program has been put in place; and
• all staff members are familiar with and are uniformly following the risk management procedures set
down by the business owner.
The program also requires that the business owner’s files be conducted at least in the manner set out in
the guidance manual (as discussed below) where it is practical to do so. Of course, this does not prevent
members from putting further risk management procedures in place. The guidance manual
recommendations should at best be viewed as minimal risk management guidelines and procedures. If
you have one or more procedures in place that you consider to be as good if not better risk management
practice, then that is acceptable. The manual is intended as a guide only, and is not intended to set
procedures in concrete that cannot be altered or enhanced.
The Self-Assessment Guidance Manual:
The Self-Assessment Guidance Manual comprises three parts:
1. This overview of the program and the self-assessment
2. An overview of the requirements conveyancers is required to meet under legislation in both the
maintaining of their licence and the running of a conveyancing business; and
3. The original Search Guidance Manual (the guidance manual).
The guidance manual was devised:
• to provide conveyancers with a risk management tool which, if implemented, will help reduce the
number of professional indemnity claims on the Policy;
• to introduce a continuous and measurable improvement system to a member’s business;
• to help members provide top quality professional advice and service to their clients;• to assist in the identification and improvement to the internal procedures, systems and corporate
policies of a member’s business;
• to assist in the provision of a system of minimum standards maintenance and compliance; and
• to provide a structured framework for on‐the‐job‐training in a helpful, constructive way enabling
maximum return for dollars spent on training and continuous professional development.
By implementing the systems suggested by the guidance manual, a conveyancer is less likely to suffer a
professional indemnity claim, and should a claim be made, the affected member and the insurers will be
better equipped to defend that claim.
Business owners should ensure that each employee involved with conveyancing transactions should have
access to and follow the guidance manual or such other office procedures implemented in place of those
recommended by the guidance manual.
It is understood that there may be certain occasions or circumstances where the procedures suggested in
the guidance manual are not practical. In such circumstances, the member is expected exercise common
sense in exercising the best practice permitted by the circumstances.
Who can Participate
Business Owner Members participating in the program must satisfactorily complete the online risk
management self-assessment by 31 May each year. Satisfactory completion requires that both parts of
the assessment are completed and a minimum pass mark of 85% is obtained in Part 2.
The participating member must be financial
The self-assessment is only available to financial members. To be considered financial, the member must
have paid his/her membership fee in full in advance for the membership year commencing 1 April in the
calendar year current at the time of carrying out the assessment and have no other moneys outstanding to
the Institute. Membership fees cannot be paid by instalments.
Anyone who is not a financial member of the Institute is not eligible to participate in the program and is
therefore not eligible for the member premium rate negotiated with the professional indemnity insurers
on behalf of its members. The full premium rate payable where the risk management program is not
completed or the member chooses not to participate, is the member rate plus 50%.
Members who are not financial as at 1 April in the current year may contact the Institute to make a
request to complete the assessment immediately following payment of membership fees for the relevant
year. Such request will not be unreasonably refused provided all matters considered necessary by the
Institute to complete membership have been complied with.
Failure to achieve an 85% pass mark
Members are entitled to make three attempts to achieve the 85% pass mark in Part 2 of the online self-
assessment. If the 85% pass mark is not achieved by the end of the third attempt, the member will not be
entitled to the member’s rate negotiated for members on their Professional Indemnity Insurance and a
loading will be added to their premium. The loading will be determined by the insurance company but is
recommended to be 50% of the negotiated member rate.
The self-assessment is intended indicate the level of the member’s awareness of risk management and the
need to follow risk management procedures. If the member fails to achieve the 85% pass mark after 3attempts, a physical assessment of member’s files and business may be carried out by a person appointed
by the Institute’s Risk Management Committee.
If the results of the physical assessment are not satisfactory, the matter will be referred to the Institute’s
Risk Management Committee for consideration and any or all the following actions may be taken:
• A meeting between the member and the committee arranged to discuss any issues raised by the
physical assessment.
• A requirement for attendance at one or more seminars by the member
• A senior conveyancer appointed to attend on the member for tuition and mentoring
• Withdrawal of membership
NB: Withdrawal of membership is regarded as a last resort, resolved on only where there appears to be
no way to remedy or assist the member to implement reasonable risk management procedures. Where
membership is withdrawn, a report will be made to the Institute's insurers for their consideration as to
whether they will continue to offer insurance, and if so whether to further load the premiums or take
whatever further action the insurers may deem necessary.
Member’s right to appeal
If the member considers that the conduct or result of the assessment was not fair or reasonable the
member may lodge an appeal with the NSW Division Council. The decision of the NSW Division Council
regarding any appeal is final.
INTERPRETATION: The above is an outline of the risk management program conducted by the Institute. All
matters that need to be determined or ruled on will be done by the Risk Management Committee and/or
the Council of the NSW Division of the Institute. The decisions of the Council and or Risk Management
committee shall be final and binding on all members.
Some facts about the AICNSW Professional Indemnity Insurance policy.
Cover: $5m in respect of any one claim and $10m in the aggregate for all claims in any
year.
Premiums: are based on gross turnover of fees each financial year with a minimum premium
determined annually.
Excess on each $5000.00 or $10,000.00 if you act(ed) for both parties to the transaction.
claim:
Run‐Off Cover: Conveyancers who cease to practice are covered for claims without having to
continue paying premiums.
Policy is non‐ Because of the nature of the policy and the provision of run‐off cover, once
cancellable: initiated the policy cannot be cancelled.Australian Institute of Conveyancers NSW Division
Risk Management
Self-Assessment
Manual
The Risk Management Self-Assessment must be completed annually by Business Owner
members of the Institute. This document sets out the guidelines for the assessment and
the minimum risk management procedures that members should have in place. It also
briefly sets out details of the Institute’s Professional Indemnity Insurance.SECTION 1: TRUST ACCOUNTS
Regardless of whether a conveyancer conducts a trust account or not they should be aware
of basic trust account requirements. For this reason, some questions on trust accounting are
included in the online self-assessment.
Trust account requirements are found in Conveyancers Licensing Act 2003, Part 5 ss 52 - 74 and
auditing requirements in ss 75 - 80. Further requirements can be found in the Conveyancers
Licensing Regulation 2015 Part 5, ss 15 - 30.
Extracted below are the relevant sections from CLR 2015
Conveyancers Licensing Regulation 2015
Division 2 Trust accounts
21 Banking of trust money
A licensee who receives trust money must pay it into the licensee’s trust account:
(a) before the end of the next banking day after the day of its receipt, if that is
practicable, or
(b) if that is not practicable, as soon as practicable after that day.
Maximum penalty: 40 penalty units in the case of a corporation or 20 penalty units
in any other case.
22 Receipts for trust money
(1) A licensee must cause a receipt to be prepared in accordance with this clause
immediately after the licensee receives trust money for or on behalf of any
person.
(2) The following particulars must be shown on each receipt:
(a) the date of issue,
(b) the number of the receipt,
(c) the name of the licensee, or (if appropriate) the business name under which
the licensee conducts the conveyancing business, and the words “Trust
Account”,
(d) the name of the person from whom the payment was received,
(e) the name and ledger reference number of the person on whose behalf the
payment was made,
(f) particulars sufficient to identify the transaction in respect of which the
money was paid,
Page | 5(g) the amount of money received and whether (or the extent to which) it was
paid in cash or by cheque, by electronic funds transfer or otherwise.
(3) A copy of the particulars shown on the receipt must be made simultaneously:
(a) on the machine-numbered duplicate form provided in the trust receipt book
(if the receipt is issued from that book), or
(b) in the cash book (if the receipt is issued otherwise than from the trust
receipt book).
(4) Receipts must be prepared in the numerical order of the series to which they
belong.
(5) The original of a receipt must be issued, on demand, to the person from whom
the trust money is received.
(6) A licensee must retain:
(a) any original receipt that is not issued to the person from whom the trust
money is received, and
(b) any original receipt that is cancelled after it is prepared, and
(c) duplicate receipts (except in the case of receipts referred to in subclause (3)
(b)).
Maximum penalty: 40 penalty units in the case of a corporation or 20 penalty units
in any other case.
23 Payment of trust money
(1) A licensee must ensure that trust money is not drawn from the licensee’s trust
account otherwise than by cheque or electronic funds transfer in accordance
with this clause (including the record keeping requirements of this clause).
Maximum penalty: 40 penalty units in the case of a corporation or 20 penalty units
in any other case.
(2) Each cheque must:
(a) be machine numbered in series, and
(b) be marked “not negotiable”, and
(c) not be payable to cash, and
(d) contain the name of the licensee, or (if appropriate) the business name
under which the licensee conducts the conveyancing business, and the
words “Trust Account”, and
(e) be signed by the licensee or another person authorised by or under clause
29 to sign the cheque.
(3) The licensee must ensure that cheques are drawn in the numerical order of the
series to which they belong and that for each cheque a record is kept of:
Page | 6(a) the number and date of issue, the payee and the amount of the cheque,
and
(b) details identifying the ledger account to be debited and the name and ledger
reference number of the person on whose behalf the cheque was drawn,
and
(c) the reason for which the cheque was drawn.
(4) The licensee must ensure that a record of the following is kept in relation to
each electronic funds transfer:
(a) the name of the person effecting the transfer and, if the transfer is effected
under the direction of some other person or under an authority delegated
under clause 29, the name of the person under whose direction or
delegation the transfer is effected,
(b) the reference number or other particulars sufficient to identify the transfer,
the date of the transfer, the payee and the amount transferred to or from
each ledger account,
(c) details identifying the ledger accounts to be debited and the name and
ledger reference number of each person on whose behalf the transfer was
made,
(d) particulars of the reason for the transfer.
24 Trust deposits
(1) A licensee who makes a deposit of money to the licensee’s trust account must
ensure:
(a) that the relevant deposit book or other written deposit record is produced to
the bank when the deposit is made, and
(b) that the following particulars are entered in the book or record:
(i) the date of the deposit,
(ii) the amount of the deposit,
(iii) whether the deposit consists of cheques, notes or coins,
(iv) if cheques are included in the deposit, the name of the drawer, the
name and branch of the bank on which the cheque is drawn and
the amount of each cheque, and
(c) that a duplicate of the particulars of each deposit is retained by the licensee.
Maximum penalty: 40 penalty units in the case of a corporation or 20 penalty
units in any other case.
(2) This clause does not apply to a deposit of money made directly to a licensee’s
trust account (except a deposit made by the licensee), electronically or
otherwise.
Page | 725 Cash book record of trust account transactions
(1) A licensee must keep in the cash book, in accordance with this clause, a record
of daily receipts and payments of money into and out of the licensee’s trust
account.
(2) The pages of the cash book must be consecutively numbered.
(3) The cash book must show the following:
(a) the consecutive numbers of receipts issued or cancelled,
(b) the consecutive numbers of cheques drawn or cancelled,
(c) in the case of money received or disbursed by means of electronic funds
transfer, the consecutive reference numbers or other means of identification
of the transfers.
(4) The particulars of payments of money into and out of a licensee’s trust account
that are required by this clause must be entered in the cash book as soon as is
practicable after the receipt or payment of the money concerned.
(5) When money required to be paid into the trust account is received, the licensee
must enter the following particulars in the cash book:
(a) the date of issue of the receipt,
(b) the number of the receipt,
(c) the name of the person from whom the payment was received,
(d) the name and ledger reference number of the person on whose behalf the
payment was made,
(e) particulars sufficient to identify the transaction in respect of which the
money was paid,
(f) the amount of money received and whether (or the extent to which) it was
paid in cash or by cheque, by electronic funds transfer or otherwise,
(g) the date of the deposit of the money to the trust account,
(h) the amount of the deposit.
(6) When money is paid out of the trust account, the licensee must enter into the
cash book the particulars required by clause 23 (3) to be recorded for a cheque
or required by clause 23 (4) to be recorded for an electronic funds transfer.
(7) At the end of each named month, the licensee must balance the cash book and
either:
(a) carry forward the balance to the commencement of the next month, or
(b) carry forward the balance to a ledger account provided for the purpose.
(8) The licensee must, at the end of each named month, prepare a statement
reconciling the balance of the licensee’s trust account with the balance of the
related cash book.
Page | 8Maximum penalty: 40 penalty units in the case of a corporation or 20 penalty units
in any other case.
26 Journal
(1) A licensee must record, in accordance with this clause, in a journal maintained
exclusively for the licensee’s trust account, all transfers between accounts in the
trust account ledger that are not effected by cheque or electronic funds transfer.
(2) The recording must include the following:
(a) the date of the transfer,
(b) the amount transferred to and from each ledger account,
(c) the names of all ledger accounts to be debited or credited,
(d) the relevant reference number or other identification,
(e) sufficient particulars to identify the transfer and the reason for the transfer.
(3) Each transfer, when entered in the journal, is to be numbered consecutively.
Maximum penalty: 40 penalty units in the case of a corporation or 20 penalty units
in any other case.
27 Trust account ledger
(1) A licensee must maintain, in accordance with this clause, a separate ledger
account for trust money received on behalf of or paid to each client.
(2) The ledger account must include the name of the client, a reference number or
other identification and particulars of each transaction affecting trust money.
(3) Those particulars must include the following:
(a) the date of the transaction,
(b) a description of the transaction,
(c) particulars sufficient to identify the trust record originating the transaction,
(d) the amount of the transaction,
(e) the resulting current balance of account arising from the transaction.
Maximum penalty: 40 penalty units in the case of a corporation or 20 penalty units
in any other case.
28 Trust account ledger trial balance
(1) A licensee must, within 21 days after the end of each named month, prepare, in
accordance with subclause (2), a trial balance statement of all ledger accounts
current as at the end of that month.
(2) The trial balance statement must:
Page | 9(a) specify the month to which it refers and the date of its preparation, and
(b) list each ledger account that does not have a zero balance at the end of that
month by stating the name of the client, the reference number or other
identification and the balance of the account at the end of the month, and
(c) show the total of the ledger account balances at the end of that month, and
(d) show a comparison between that total and the balance in the cash book
reconciled with the balance in the trust account as required by clause 25
(8).
Maximum penalty: 40 penalty units in the case of a corporation or 20 penalty units
in any other case.
29 Signing of cheques or effecting electronic funds transfers—trust account
(1) A licensee that is a corporation or who is a sole proprietor or a partner has
authority to sign a cheque (a trust cheque) drawn on, or to effect an electronic
funds transfer (a trust EFT) from, the licensee’s trust account.
(2) A licensee in charge of a place of business has authority to sign a trust cheque
or effect a trust EFT.
(3) A licensee who has authority otherwise than as a delegate to sign trust cheques
or effect trust EFTs may delegate that authority:
(a) if the licensee is a corporation—to one or more directors of the corporation
each of whom is a licensee, and to not more than 2 employees at each
place of business of the corporation, or
(b) if the licensee is a sole proprietor or a partner—to not more than 2
employees at each place of business of the sole proprietor or partnership,
or
(c) if the licensee is a person in charge of a place of business—to not more
than 2 employees at the place of business.
(4) The delegation must be in writing and signed by the licensee and the delegate
and may be revoked by the delegator by giving written notice of revocation to
the delegate.
(5) A delegation in force under this clause authorises the delegate to sign trust
cheques or effect trust EFTs to which the delegation relates:
(a) (except in the case of a delegation by a licensee that is a corporation) only if
the delegator is unable to sign the cheque or effect the transfer with due
expedition because of his or her being sick or injured or absent for good
reason, and
(b) subject to such terms and conditions (whether relating to the value of the
cheques or transfers or the number of signatories or not) as may be stated
in the instrument of delegation.
Page |
10(6) This clause does not remove any additional prohibition or restriction on the
signing of trust cheques or the effecting of trust EFTs made by the constitution
or the terms of the partnership agreement of any company or partnership
concerned.
(7) A licensee who purports to delegate his or her authority to sign a trust cheque
or effect a trust EFT otherwise than in accordance with this clause is guilty of an
offence.
Maximum penalty: 40 penalty units in the case of a corporation or 20 penalty units
in any other case.
(8) A person who signs a trust cheque or effects a trust EFT purporting to do so as
the delegate of a licensee but who has not been authorised to do so in
accordance with this clause is guilty of an offence.
Maximum penalty: 40 penalty units in the case of a corporation or 20 penalty units
in any other case.
30 Account in the name of a licensee
(1) A licensee may maintain in his or her trust account ledger an account in his or
her name:
(a) for the purpose of aggregating in the account, by transfer from other
accounts in the trust account ledger, money properly due to the licensee for
costs and disbursements, and
(b) in respect of money in which the licensee has a personal and beneficial
interest as a vendor, purchaser, mortgagor, mortgagee, lessor, lessee or in
other like capacity.
(2) A licensee must withdraw money held in an account under subclause (1) (a) not
later than 21 days after the day on which the money is transferred to the
account.
(3) A licensee must withdraw money held in an account under subclause (1) (b):
(a) at the conclusion of any matter to which the money relates, or
(b) if it comprises rent, interest, instalments of principal or other periodic
payments—not later than 6 months after the date on which the money was
credited to the account.
Maximum penalty: 40 penalty units in the case of a corporation or 20 penalty units
in any other case.
Page |
11INFORMATION ON LODGING A TRUST ACCOUNT AUDIT
REPORT OR STATUTORY DECLARATION
Frequently asked questions
Who must lodge a trust account auditor’s report or statutory declaration?
The Conveyancers Licensing Act 2003 administered by Office of Fair Trading, requires all
licensees to lodge either a trust account auditor’s report or, where no trust moneys have been
held, a statutory declaration to that effect.
Note: Where a conveyancing business is owned by a company, the company licensee must
lodge an auditor’s report or statutory declaration (as appropriate), and the licensee director(s)
of the company should lodge a statutory declaration that the licensee as an individual held no
trust moneys.
Lodgement must be within 3 months of the end of the audit period which is 30 June each year,
OR within 3 months of any separate audit period applicable. You still need to lodge even if you
ceased trading during the period or only traded for part of the period.
What is the audit period?
The audit period for conveyancer’s trust accounts is 1 July to 30 June. (s76 Conveyancers
Licensing Act 2003)
When does it have to be lodged by?
The last day for lodgement is 30 September each year or within 3 months from the end of the
audit period.
How do I know whether to lodge an auditor’s report or a statutory declaration?
If you held money on behalf of a client or third party during the audit period, you must
engage an auditor and lodge an auditor’s report form.
If you did not hold or receive any money for or on behalf of any person during the audit
period, you must lodge a statutory declaration form to this effect.
Who can conduct the audit?
The Auditor must be registered with the Australian Securities and Investments
Commission (ASIC) or be qualified under s.115(1)(b) of the Act.
Check that an auditor is registered by searching for their details on the ASIC website.
Where do I get the forms?
Forms are available for download from the Office of Fair Trading website.
What if I am in partnership with other licensees?
Only one licensee in a partnership has to lodge an audit for the partnership.
If you are in partnership or you are the licensee-in-charge of a corporation and you hold a
separate licence but you personally did not receive or hold money in a trust account during
the audit period, you still need to lodge your own statutory declaration.
Page |
12How do I lodge a statutory declaration?
Complete the form for either an individual licensee or a corporation before a Justice of the
Peace or a solicitor, sign it, have it witnessed, retain a copy and post the form to Fair Trading
at the Locked Bag mailing address on the form.
How do I lodge an auditor’s report?
The auditor must be a currently registered company auditor. You should tell the auditor the
report must be lodged by 30 September and confirm that the auditor will be able to complete
the report in time to enable lodgement by the due date, before you engage the auditor.
Give the auditor access to all records and documents relating to money held in a trust account
for the audit period, as soon as possible after the end of the audit period. You do not need to
wait until you obtain a report form to provide access.
Monitor the progress of your report with the auditor on a regular basis. Do not just leave the
report with the auditor and forget about it.
If your auditor cannot complete the report within the agreed timeframe due to some
unforeseen circumstance preventing on time lodgement, you should immediately
engage another auditor.
Who is responsible for lodging the auditor’s report correctly and by the due date?
When the report is completed you should ask your auditor to deliver the report to you so you
can lodge it with Fair Trading. Do not rely on your auditor to lodge the report. The Act makes
it quite clear that it is the licensee’s responsibility to ensure the report is lodged by the due
date. A licensee cannot pass this responsibility on to an auditor or any of the auditor’s
employees.
The auditor’s report should be posted to Fair Trading at the Locked Bag address on the form.
If it is sent by surface mail, a minimum of four working days should be allowed for delivery.
Can the lodgement deadline be extended?
All licensees are required to lodge by the due date. The deadline can be extended
but only in exceptional circumstances which existed over a period of time and can
be supported by evidence.
Reasons such as not receiving or misplacing forms, being unaware of the requirement to
lodge, forgetting to provide access to the auditor, allowing insufficient time for the auditor to
complete the report, forgetting to lodge the report, the auditor was too busy to complete the
report or the auditor forgot to lodge the report, are not acceptable.
What happens if I don’t lodge the auditor’s report or statutory declaration by the due
date?
If you do not lodge an auditor’s report or a statutory declaration by the due date or at all,
without an acceptable reason, Fair Trading will contact you and take action based on the
circumstances, your lodgeement history and any other previous matters.
Action may include issuing a formal caution, a fine of $550 for a late lodged audit by an
individual or $1,100 for a corporation. A $1,100 fine applies for a late lodged statutory
declaration by an individual or corporation. Prosecution could also occur or disciplinary action
taken and a notice to show cause issued which can result in a monetary penalty, licence
Page |
13suspension or cancellation, or disqualification of a person from holding a licence.
If successful prosecution or disciplinary action is taken against a licensee, the result is
recorded and made public on Licence Check on the Fair Trading website,
www.fairtrading.nsw.gov.au. If you are required to lodge an auditor’s report and fail to lodge,
you will not be able to renew your licence.
What do I do if I change my address?
If you change your registered address, mailing address or residential address and
associated contact numbers, you must send notification to Office of Fair Trading in writing
within 14 days.
Failure to notify a change of address can incur a penalty of up to $5,500.
Page |
14SECTION 2 - CONTINUING PROFESSIONAL
DEVELOPMENT (CPD)
A conveyancer must not do conveyancing work unless the conveyancer holds a licence
and is protected by professional indemnity insurance cover. It is a condition of the licence
that the conveyancer complete a set amount of continuing education each year.
A present, a licensee is required to complete a minimum of 5 points of continuing education in
the 12 months from the of issue of the conveyancer’s licence. This can be done by attending
seminars or lectures, by presentation of a lecture (provided it is considered of suitable
content) or private study of video or audiotapes.
By way of overview, one point is awarded for each one hour of face to face attendance at
lectures or seminars and also for the presentation of a lecture. One half of a point is awarded
for each hour of study with video or audiotapes.
The contents of the lectures or the tapes must be of suitable intellect or practical content and
deal with the law related to conveyancing or practice management.
Conveyancers are encouraged to complete more than the minimum of 5 hours of
continuing education in order to increase their knowledge and competence.
Frequently Asked Questions
Can anyone be exempt from completing the minimum 5 hours continuing education?
The Office of Fair Trading may exempt someone from whole or part of the requirement for
further education but only in exceptional circumstances.
In what period of the year must continuing education be completed?
The conveyancer’s five points must be obtained in the twelve months following the issue of
the conveyancer’s licence or such other period specified in the conditions attached to the
licence or as advised by the Office of Fair Trading.
What happens if I don't complete the required educational points?
As it is a condition of your licence that you obtain the points, you may not qualify for a new
licence if you have not met this requirement. You should apply to the Office of Fair Trading for
an extension of time to complete the course.
Do I need to keep a record of lectures etc. attended?
Yes - When applying for a renewal of licence evidence does not need to be provided, however,
the Office of Fair Trading will do spot checks and if you are requested to do so you must
provide evidence that you have completed the required course of continuing education. A form
for this purpose is available from the Institute;
Do I need to comply with the continuing education requirements if I am overseas or
Page |
15interstate?
Yes - Any conveyancer holding a current licence must complete the required course of
continuing education.
What courses are accredited?
The Office of Fair Trading does not accredit courses. The courses must, however, be
presented by someone qualified in the subject covered, must deal with matters related to
conveyancing or practice management, must be related to the immediate or long term needs
of the conveyancers professional development and the practice of conveyancing. It is the
conveyancer's responsibility to ensure the course is relevant and acceptable for continuing
education.
A copy of the Commissioner’s Guidelines is reproduced on the next page.
Page |
16CONVEYANCERS LICENSING ACT 2003.
COMMISSIONER’S GUIDELINES FOR FURTHER EDUCATION.
1. A licensee with a condition requiring further education to be undertaken must
complete 5 points of professional development in the 12 months period following the
granting or the renewal of the licence.
2. The professional development must consist of:
- an education program;
- a seminar, workshop, lecture, conference or discussion group;
- a multimedia or website based program; or
- research and preparation of an article published in a legal publication; or
- any combination of two or more of the above.
3. The professional development must be of significant intellectual or practical
content and must be relevant to conveyancing work.
4. The professional development must be conducted by persons qualified in the subject
matter to be covered.
5. A licensed conveyancer is entitled to one point for each of the following:
- one hour of participation in a course of education relevant to conveyancing work;
- one hour of participation in a seminar, workshop, lecture, conference or discussion group;
- one hour spent in the preparation of written or oral material forming part of the formal
instruction for a course or program relating to conveyancing work;
- for every 1000 words of an article published in a legal publication or other such
publication (up to a maximum of 3 points);
- for every two hours spent on a program of private study of audio or video material that
has been developed as part of a conveyancing or legal further education program (up
to a maximum of 3 points).
6. In exceptional circumstances a licensee may be exempted from completing part or
all of the requirement for further education.
7. A licensed conveyancer must certify that he or she has undertaken 5 points of
professional development in the 12 month period immediately prior to applying for
renewal of a licence.
Page |
17SECTION 3: SCOPE OF WORK
s.4 Conveyancers Licensing Act 2003 (extracted below) sets out what work a licensed
conveyancer is permitted to do.
It can be tempting if you have come from a legal office background to prepare a will, do a probate
application, draft a deed, or do any of those things you used to do as a routine part of your legal
office training. However, these “small jobs” are legal work as referred to in s4(4) CLA and is not
Conveyancing Work as defined in the s.4 and, in the case of a Will, specifically excluded by s.4(3).
Powers of Attorney
The odd man out in the above is the preparation, advice and witnessing or a Power of Attorney.
The Conveyancers Licensing Act permits Licensed Conveyancers to undertake “conveyancing
work” which is defined in s. 4 to include “legal work (such as the giving of advice or the preparation,
perusal, exchange or registration of documents) that is consequential or ancillary to a
conveyancing transaction.
Prior to the Power of Attorney Act 2003, a Licensed Conveyancer was been able to draft or
complete a power of attorney if it was required for a conveyancing transaction that the
conveyancer had received instructions to act on, but not otherwise.
Now that Licensed Conveyancers, who have completed an approved course can be “prescribed
witnesses” under s.19 of the Powers of Attorney Act, there is some confusion as to when a Licensed
Conveyancer can prepare an Enduring Power of Attorney.
The Power of Attorney Act 2003 was never intended to alter the scope of the work a Licensed
Conveyancer can do under the Conveyancers Licensing Act. Therefore a Licensed Conveyancer
can prepare a Power of Attorney under the conditions imposed by the Conveyancers Licensing Act
(being consequential or ancillary to a conveyance) and any Conveyancer who has completed an
approved course, can prepare, advise, peruse, give advice etc on an Power of Attorney (whether
Enduring or not), and witness that power of attorney as a prescribed witness.
However, if a Licensed Conveyancer is approached regarding an Enduring Power of Attorney that
is not consequential or ancillary to a conveyancing transaction, then it would appear that they could
only do those things listed in s.19 of the Power of Attorney Act (ie witness the principal’s signature,
explain to the principal the effect of the Power of Attorney document, and give the certificate under
s.19) but could not actually draft the instrument.
Page |
18Conveyancers Licensing Act 2003 Part 1 Section 4
4. Conveyancing Work
(1) For the purposes of this Act, conveyancing work is legal work carried out in connection
with any transaction that creates, varies, transfers or extinguishes a legal or equitable
interest in any real or personal property, such as (for example) any of the following
transactions:
(a) a sale or lease of land,
(b) the sale of a business (including the sale of goodwill and stock-in-trade), whether or
not a sale or lease of land or any other transaction involving land is involved,
(c) the grant of a mortgage or other charge.
(2) Without limiting subsection (1), conveyancing work includes:
(a) legal work involved in preparing any document (such as an agreement, conveyance,
transfer, lease or mortgage) that is necessary to give effect to any such transaction,
and
(b) legal work (such as the giving of advice or the preparation, perusal, exchange or
registration of documents) that is consequential or ancillary to any such transaction,
and
(c) any other legal work that is prescribed by the regulations as constituting
conveyancing work for the purposes of this Act.
(3) However, conveyancing work does not include the carrying out of any work for the
purpose of:
(a) a mortgage on non-residential property where the amount secured by the mortgage
exceeds 7 million dollars (with non-residential property being any property that is not
residential property for the purposes of Division 8 of Part 4 of the Conveyancing Act
1919), or
(b) commencing or maintaining legal proceedings, or
(c) establishing a corporation or varying the memorandum or articles of association of a
corporation, or
(d) creating, varying or extinguishing a trust, or
(e) preparing a testamentary instrument, or
(f) giving investment or financial advice, or
(g) investing money otherwise than as provided for by Division 2 of Part 5,
and does not include any work that is prescribed by the regulations as not constituting
conveyancing work for the purposes of this Act.
(4) In this section:
legal work means work that, if done for fee or reward by a person who is not an Australian
legal practitioner, would give rise to an offence under Part 2.2 of the Legal Profession Act
2004.
Page |
19SECTION 4: GENERAL CONDUCT OF
LICENSEES
Statutory Requirements:
The Conveyancers Licensing Act 2003 (CLA) and the Conveyancers Licensing Regulation 2015
(CLR) together set out what is required of any conveyancer wishing to carry out conveyancing
work. Whilst all licensees should be familiar with both pieces of legislation we have extracted
below are the following sections:
- Part 3 CLA (ss 26-33) – General Conduct of Licensees
- Sch 3 CLR – Rules of Conduct
- S35 CLA - Advertisement to include information about licensee
- Division 5 (ss.36-41) – Disclosure of costs and other matters
It is strongly recommended that all conveyancers be familiarize themselves closely with these
provisions.
Page |
20Conveyancers Licensing Act 2003
Part 3 – General Conduct of Licensees
26 Sharing of receipts with unqualified persons
(1) A licensee must not share the receipts of a conveyancing business with another person
unless:
(a) the other person is a licensee, or
(b) the sharing of those receipts with that other person is approved by the
Director-General and does not contravene the provisions of any regulation under
this section.
Maximum penalty: 200 penalty units in the case of a corporation or 100 penalty units in any
other case.
(2) An approval may not be given under this section unless the Director-General is
satisfied that the sharing of the receipts of the conveyancing business in accordance
with the approval:
(a) will not result in a person other than a licensee gaining control of the business, and
(b) will not adversely affect the independent conduct of the licensee’s business or give
rise to a conflict between the interests of the licensee and the interests of any of the
licensee’s clients.
(3) This section does not prevent a party to a transaction from recovering from any
other person the costs of conveyancing work carried out by a licensee who is
employed by the party under a contract of service.
(4) The regulations may make provision for or with respect to restricting the circumstances
in which a licensee may share the receipts of a conveyancing business with another
person who is not a licensee.
27 Partnerships
(1) A licensee must not be in partnership with another person unless:
(a) the other person is a licensee, or
(b) the partnership with that other person is approved by the Director-General and
does not contravene the provisions of any regulation under this section.
Maximum penalty: 200 penalty units in the case of a corporation or 100 penalty units in any
other case.
(2) An approval for a partnership may not be given under this section unless the Director-
General is satisfied that the business of the partnership concerned will include
conveyancing business.
(3) An approval may not be given for a partnership with a person who is the holder of a
licence or certificate of registration under the Property, Stock and Business Agents
Act 2002.
(4) The regulations may make provision for or with respect to restricting the classes of
persons (other than licensees) with whom a licensee may be in partnership.
(5) The following provisions apply in respect of a partnership in which a licensee is a member:
Page | 21(a) a partner who is not a licensee is not guilty of an offence under Part 2.2 of the Legal
Profession Act 2004 merely because the partner conducts business of the partnership
that is conveyancing business,
(b) a partner who is not a licensee is not guilty of an offence under Part 2.2 of the
Legal Profession Act 2004 merely because the partner receives any fee, gain or
reward for business of the partnership that is conveyancing business,
(c) a partner who is not a licensee is not guilty of an offence under Part 2.2 of the Legal
Profession Act 2004 merely because the partner holds out, advertises or represents
himself or herself as a member of a partnership conducting conveyancing business,
(d) a partner who is a licensee does not contravene this Part merely because the
partner shares with any other partner the receipts of business of the partnership
that is conveyancing business,
(e) Division 2 of Part 5 (Trust money), Part 7 (Claims arising from failure to account)
and Part 8 (Management and receivership) apply, subject to the regulations, as if
each partner who is not a licensee were a licensee. Those provisions so apply in
connection with any business of the partnership (whether or not it is conveyancing
business).
28 Conduct of other businesses
(1) The regulations may prohibit a licensee who conducts a conveyancing business, or
who is employed in the conduct of a conveyancing business, from conducting, or being
employed in the conduct of, any other business or class of businesses.
(2) A licensee must not conduct any business, or be employed in the conduct of any
business, in contravention of the regulations under this section.
Maximum penalty: 200 penalty units in the case of a corporation or 100 penalty units in any
other case.
Division 3 Employees
29 Employment of disqualified persons
A licensee must not, in connection with his or her conveyancing business, employ or pay
a person whom the licensee knows to be a disqualified person.
(1) Subsection (1) does not apply in relation to a person who is employed or paid in
accordance with leave given by the Director-General.
(2) If the Director-General refuses an application by a person for leave under this section,
the person may apply to the Administrative Decisions Tribunal for a review of the
decision.
(3) Leave given under this section may be limited as to time or given subject to specified
conditions.
(4) A disqualified person must not seek employment or payment in connection with a
licensee’s conveyancing business unless he or she has informed the licensee of
the fact of his or her disqualification.
Maximum penalty (subsection (5)): 50 penalty units.
Page | 2230 Liability of licensee for acts of employees
A licensee who employs a person at any place of business of the licensee is responsible,
in tort and in contract, for anything done or not done by the person:
(a) within the scope of the employee’s authority, or
(b) for the benefit, or the purported or intended benefit, of the licensee or the licensee’s
business.
31 Licensee to keep records of certain employees
(1) A licensee must make and keep a record of the name and residential address of each
employee that the licensee employs as a conveyancer.
(2) The licensee must keep the record for at least 3 years after the person ceases to be an
employee.
(3) The licensee must keep the record in the form of a register of employees and that
register must be kept at the place of business of the licensee at which the employee
is employed or at such other place as the Director- General may approve.
Maximum penalty: 50 penalty units.
32 Duty of licensee to notify disqualification of employee
A licensee must notify the Director-General in writing within 7 days after becoming
aware that a person employed by the licensee has become a disqualified person.
Maximum penalty: 50 penalty units.
33 Employees required to notify disqualification
A person employed by a licensee must notify the licensee within 7 days after the person
becomes a disqualified person.
Maximum penalty: 50 penalty units.
Page | 23RULES OF CONDUCT
Schedule 3 Conveyancers Licensing Regulation 2006 (Clause 8)
1. Knowledge of Act and this Regulation
A licensee must have a knowledge and understanding of the Act and this Regulation, and
such other laws as may be necessary to enable the licensee to exercise his or her functions as
a conveyancer lawfully.
2. Honesty, fairness and professionalism
A licensee must act honestly, fairly and professionally with all parties in a transaction.
A licensee must not misinform or otherwise mislead or deceive any parties in negotiations or a
transaction.
3. Skill, care and diligence
A licensee must exercise reasonable skill, care and diligence.
4. Fiduciary obligations
A licensee must comply with the fiduciary obligations arising from the licensee’s activities as a
conveyancer.
5. To undertake only work within competence
A licensee must not accept instructions to act as a conveyancer unless the licensee is
competent to perform the conveyancing work concerned.
6. To perform work promptly
A licensee must only accept instructions to act as a conveyancer if he or she reasonably
expects to be able to carry out the conveyancing work concerned reasonably promptly.
7. To act in client’s best interests
A licensee must act in the client’s best interest at all times unless it would be contrary to the
Act or this Regulation or otherwise unlawful to do so.
8. To communicate regularly with client
A licensee must communicate regularly with a client to ensure that the client is kept up to
date with the progress of the client’s matter.
9. To act in accordance with client’s instructions
A licensee must act in accordance with a client’s instructions unless it would be
contrary to the Act or this Regulation or otherwise unlawful to do so.
10. To confirm client’s oral instructions in writing
A licensee must ensure that oral instructions (other than those of a trivial nature) received
from a client are confirmed with the client in writing as soon as possible after they are
received.
11. Conflicts of interest
A licensee must not accept instructions to act, or continue to act, as a conveyancer for a
Page | 24client if doing so would place the licensee’s interests in conflict with the client’s interests.
12. Acting for more than one party to a transaction
(a) A licensee may only act for more than one party to a transaction if the licensee
discloses in writing to each party that the licensee is intending to act for the others, and
each party consents in writing to the licensee so acting.
(b) If a licensee who is acting for more than one party cannot continue to act for all of the
parties without acting in a manner contrary to the interests of one or more of them, the
licensee must cease to act for all of the parties.
(c) The disclosure referred to in subclause (1) must indicate that, as a consequence of
acting for more than one party to the transaction:
(i) the licensee may be prevented from:
(ii) disclosing to each party all information within the licensee’s knowledge that is relevant
to the transaction, and
(iii) giving advice to one party that is contrary to the interests of the other, and
(d) the licensee will cease to act for all parties if the licensee would, otherwise, be
obliged to act in a manner contrary to the interests of one or more of them.
13. Confidentiality
A licensee must not, at any time, use or disclose any confidential information obtained
while acting on behalf of a client unless:
(a) the client authorises disclosure, or
(b) the licensee is permitted or compelled by law to disclose the information.
14. Noting of instructions, enquiries and telephone conversations
(a) A licensee must make a written record of the following communications (other than those
of a trivial nature):
(i) all instructions received from the licensee’s clients and advice given,
(ii) all telephone conversations made or received in connection with conveyancing work,
(iii) all enquiries made in connection with conveyancing work and responses given.
(b) The record must be in the form of a file note and be kept on the file of the client to whom
the conveyancing work relates.
(c) The record must be retained for at least six years after it is made.
(d) A record required to be kept under this rule may be maintained in electronic form,
provided it can be produced in a permanent legible form in the English language.
15. Referral to service provider
(a) A licensee who refers a client or prospective client to a service provider must not falsely
represent to the client or prospective client that the service provider is independent of the
licensee.
(b) A service provider is considered to be independent of a licensee if:
(i) the licensee receives no rebate, discount, commission or benefit for referring a
client or customer to the service provider, and
Page | 25(ii) the licensee does not have a personal or commercial relationship with the service
provider.
(c) The following are examples of a personal or commercial relationship:
(i) a family relationship,
(ii) a business relationship,
(iii) a fiduciary relationship,
(iv) a relationship in which one person is accustomed, or obliged, to act in
accordance with the directions, instructions or wishes of the other person.
(d) If the service provider is not independent of the licensee, the licensee must disclose to
the client or prospective client:
(i) the nature of any relationship, whether personal or commercial, the licensee has with
the service provider, and
(ii) the nature and value of any rebate, discount, commission or benefit the
licensee may receive, or expects to receive, by referring the client or
prospective client to the service provider.
(e) In this rule:
(f) service provider means a person who provides a service in relation to a
conveyancing transaction (for example, a building inspector, pest inspector, valuer,
surveyor, insurer, mortgage originator, mortgage broker or another licensee).
16. Inducements
A licensee must not offer to provide to any other person any gift, favour or benefit, whether
monetary or otherwise, in order to induce any third person to engage the services of the
licensee as conveyancer in respect of any matter.
17. Soliciting through false or misleading advertisements or communications
(a) A licensee must not solicit clients or customers through advertisements or other
communications that the licensee knows or should know are false or misleading.
(b) A licensee must not include any matter (including any statement, slogan or logo) on
stationery or business cards used in connection with conveyancing work that the
licensee knows or should know is false or misleading.
18. Termination of licensee’s services
A licensee must complete the conveyancing work in respect of which the licensee has
accepted instructions to act for a client unless:
(a) the licensee and the client have otherwise agreed, or
(b) the client terminates the services of the licensee, or
(c) the licensee terminates the provision of services to the client by giving 14 days written
notice to the client.
19. Transfer of conveyancing work
If:
(a) a licensee ceases to act for a client before completing the conveyancing work in respect
of which the licensee has accepted instructions to act for a client, and
Page | 26(b) the client instructs another licensee or a solicitor to take over the conduct of the client’s
conveyancing work,
the first-mentioned licensee must, within 14 days after receipt of a direction in writing from
the client, deliver to the second-mentioned licensee or the solicitor all relevant documents to
which the client is entitled and any information that is necessary for the proper conduct of
the client’s conveyancing work.
20. Transfer of conveyancing business
(a) If a licensee intends to transfer the whole or part of the licensee’s conveyancing
business (including clients’ work in progress) to another licensee or a solicitor, the
first-mentioned licensee must give each client 14 days written notice of the following:
(i) the intended transfer of documents to the licensee or solicitor acquiring the
business, unless a contrary direction is received from the client,
(ii) the client’s right to give to the first-mentioned licensee a contrary direction in
relation to the conduct of the client’s affairs and the delivery of the client’s
documents.
(b) If the licensee holds money on behalf of the client in trust, the notice referred to in
subclause (1) must also advise the client of the following:
(i) the balance of money held on the client’s behalf,
(ii) the licensee’s intention to transfer the relevant account to the licensee or solicitor
acquiring the business, unless advised by the client to the contrary,
(iii) the client’s right to give to the first-mentioned licensee a contrary direction as
to the manner in which the licensee should deal with the account on the
client’s behalf.
(c) Nothing in this rule limits the operation of any other legislative provisions applicable to
the trust money held by the licensee.
21. Conducting another business
(a) A licensee who engages in the conduct of another business concurrently with the
conduct of the licensee’s conveyancing business must ensure the following:
(i) that the other business is not of such a nature that the licensee’s involvement in it
would be likely to impair, or conflict with, the licensee’s duties to clients in the
conduct of the conveyancing business,
(ii) that separate and independent files, records and accounts are maintained in
respect of the conveyancing business and of the other business,
(iii) that the licensee ceases to act for a client of the conveyancing business if the
licensee’s interest in the other business is likely to conflict with the client’s
interests.
(b) A licensee is taken to be engaged in the conduct of another business if the licensee, or an
associate:
(i) is entitled, at law or in equity, to an interest in the assets of the business which
is significant or of relatively substantial value, or
(ii) exercises any material control over the conduct and operation of the business, or
(iii) has an entitlement to a share of the income of the business which is substantial,
Page | 27having regard to the total income which is derived from the business.
22. Independence of licensee advising on loan or security documents
(a) A licensee must provide competent, independent and disinterested advice in advising
a proposed signatory to documents creating a loan or a security interest (loan or
security documents).
(b) The licensee must not act for the lender in the transaction to which the loan or security
documents relate.
(c) The licensee must not advise a proposed signatory to loan or security documents in any
circumstances where the interests of any signatory or proposed signatory to the
documents conflict with those of the licensee or with those of any other client of the
licensee.
23. Advising proposed signatories on loan or security documents
(a) A licensee must advise a proposed signatory to documents creating a loan or security
interest (loan or security documents) of those matters that the licensee, in exercising
the professional skill and judgment called for in the circumstances of the particular case,
considers appropriate.
(b) Without limiting the generality of subclause (1), when advising a proposed signatory
who is to be a borrower or a security provider referred to as a borrower in loan or
security documents (the borrower), the licensee must, where applicable, advise the
borrower of the following:
(i) that by signing the documents the borrower will be liable for regular payments of
interest and repayment of the amount of the loan at the due date,
(ii) that if the borrower fails to make any payment on time, the lender can charge a
higher rate of interest, and the lender’s costs of rectifying that failure,
(iii) that if the borrower fails to comply with any of the terms and conditions of the loan
including the obligations to pay principal or interest:
(1) the lender can sue the borrower personally, and
(2) the lender may take possession of the borrower’s property and, after notice,
sell it to recover the amount owing together with interest and other costs
including conveyancer’s costs, the costs of selling the property and the costs
of maintaining the property, and
(3) if the proceeds of sale of the borrower’s property are insufficient to satisfy the
debt to the lender, the lender can sue the borrower for the deficit,
(iv) that if the National Credit Code applies, additional obligations, rights and remedies
may apply as set out in the loan documents.
(c) A licensee giving independent advice to a proposed borrower must obtain
the borrower’s written acknowledgment of the independent advice.
(d) Without limiting the generality of subclause (1), when advising a proposed signatory who
is to be a third party mortgagor, guarantor, surety mortgagor or indemnifier providing
security for the borrower (the guarantor), the licensee must, where applicable, advise
the guarantor of the following:
(i) that if the borrower fails to make any payment on time, the guarantor will be liable
to remedy that failure, and that could involve the guarantor in payment to the
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