Guidance

Practice guide 81: encouraging the use of digital technology in identity verification

Published 12 March 2021

Applies to England and Wales

Please note that HM Land Registry’s practice guides are aimed primarily at solicitors and other conveyancers. They often deal with complex matters and use legal terms.

1. Introduction

There is widespread demand across the conveyancing market for more resilient, straightforward and convenient identity verification solutions.

We believe that there is scope for an alternative higher standard of identity check – one that uses biometric and cryptographic technology, is defined and gives clarity and certainty to the conveyancer that they have discharged their duty on identity verification in connection with land registration applications.

The guidance below sets out that alternative standard for checking identity and it can be applied immediately.

The guidance is separate to our requirements as to how confirmation or evidence of identity is to be provided as part of an application for registration. For information about these requirements please see practice guide 67: evidence of identity.

The guidance also does not deal with identity checks required by regulatory or representative bodies, or required by law, such as under the money laundering legislation.

2. The digital identity standard

The enhanced level of check is defined by reference to a set of requirements, collectively known as the HM Land Registry digital identity standard. The standard is founded on the principles within the Government’s Good Practice Guide GPG45. The requirements involve biometric and cryptographic checking of identity and verification that the individual or individuals signing of behalf of corporations are the owner of the property or otherwise a genuine party to a registrable transaction.

The standard when followed, constitutes what is regarded by HM Land Registry as a discharge of the duty to verify the identity of a party to a registrable transaction.

A conveyancer who adopts this approach will have fulfilled their obligation to take reasonable steps in relation to the requirement to verify their client’s identity and will reach the “Safe Harbour”. This means that if a conveyancer carries out the steps described in the standard, HM Land Registry will not pursue any recourse claim against the conveyancer resulting from the registration of a fraudulent transaction on the grounds that identity checks were inadequate.

The conditions for meeting the standard are set out below.

Requirements 1 to 3 must be carried out by all conveyancers acting for a party to the transaction. Requirement 4 is an additional check to be carried out by the conveyancer who represents a transferor, borrower or lessor in the transaction.

3. Requirements of the standard

3.1 Requirement 1: obtain evidence

You must find out if the person you are representing is who they say they are.

To meet this requirement, they must hold a form of evidence that can be checked by interrogating cryptographic security features within that evidence. The security features must include an electronically held photo of the identity against which biometric facial recognition checks may be made.

Acceptable forms of evidence that meet these requirements are:

• biometric passports that meet the International Civil Aviation Organisation (ICAO) specifications for e-passports
• identity cards from an EU or EEA (European Economic Area) country that follow the Council Regulation (EC) No 2252/2004 standards and contain biometric information
• a UK biometric residence permit

3.2 Requirement 2: check the evidence

You must check that the evidence that meets the first requirement is genuine to ensure it has not been forged and is still current.

You should do this by using an identity check provider to verify for you that the documentary and cryptographic security features of the evidence are genuine.

The identity check provider’s system must read the chip within the evidence using Near Field Communication by providing any required cryptographic keys and then:

• check the digital signature is correct for the organisation that issued the evidence
• check the signing key belongs to the organisation and has not been revoked
• extract the biometric information needed for requirement 3

Checking the evidence is genuine by just using a photograph of the document or the Machine Readable Zone does not meet the requirement.

3.3 Requirement 3: match the evidence to the identity

You must check that the person presenting the information matches the photo in the evidence provided. You must do this by using an identity check provider to make sure that the biometric information captured from a ‘liveness check’ (explained below) matches biometric information in the chip within the genuine evidence you have obtained.

To meet this requirement the identity check provider must:

• use photographs or video (that are captured live as part of the checking process) of the person presenting the information performing tasks to confirm the person presenting the information is real (known as an enhanced ‘liveness’ test)
• be able to identify when someone is trying to use a presentation attack (known as an anti-spoofing check). You must be able to identify simple and complex artefacts that have taken a range of time, money and effort to create; this could mean making sure the person is not showing a 3D animated avatar on a hijacked computer or device
• ensure the person’s biometric information is captured under controlled conditions that do not reduce the accuracy of the type of biometric check being used (light, noise, and humidity impact the success rates for face biometrics and should be adjusted if needed)
• use a biometric algorithm that’s been proven to be effective against a recognised benchmark, like the National Institute of Standard and Technology’s (NIST’s) face recognition vendor test guidance
• have a false match (where the system has incorrectly identified the individual) of a maximum rate of 0.01%
• have a maximum non false match rate (where the system has incorrectly rejected the individual) of 1%.

3.4 Requirement 4: obtain evidence to ensure the transferor, borrower or lessor is the same person or entity as the owner

This requirement needs to be met by the conveyancer representing a transferor, borrower or lessor.

Check for individuals

You must connect the individual to the property by obtaining 2 examples from the following list of evidence types and checking that the name and address of the individual claiming the identity match those on the evidence provided.

We accept:

• utility bills, bank or building society statements dated within the last 3 months
• local authority council tax bills for the current financial year
• original mortgage statements from a recognised lender for the last full year
• current UK or EEA photocard driving licences
• HM Revenue and Customs (HMRC) self-assessment letters or tax demands dated within the current financial year
• an insurance policy schedule for the property
• a current firearm or shotgun certificate
• credit cards bearing the Mastercard or Visa logo, an American Express or Diners Club card, or a debit or multi-function card bearing the Maestro or Visa logo which was issued in the United Kingdom and is supported by an account statement less than 3 months old
• a copy of the agreement for purchase of the property
• a lettings agent agreement on headed paper
• a local authority building regulations sign off for works undertaken to the property addressed to the individual
• management company service charge demands for the property addressed to the individual
• confirmation of tenancy deposit scheme registration

The statements referred to in the list above can be postal or online statements. Reliance can be placed on an online statement provided it is evident that it has been received or downloaded by the individual and refers to the subject property. Screenshots of online statements will not satisfy the Standard.

Checks for UK registered companies

Obtain evidence to ensure the transferor, borrower or lessor is the same legal entity as the owner

This requirement needs to be met by the conveyancer representing a UK registered company transferor, borrower or lessor.

To meet this requirement you must obtain evidence to verify that the intended transferor, borrower, or lessor is the same legal entity as the relevant corporate owner of the property interest that will be transferred, charged or leased and each individual who is to sign in the transaction on behalf of that legal entity is authorised to do so. The requirement will be met by completing all of the following steps:

1. 1. Obtain company information, including the name, company or other registration number, registered office address and the full names of the company officers.
2. 2. Verify that information through one or more of the sources below:
   1. a) certificate of incorporation
   2. b) details from the relevant company registry, confirming details of the company officers and their address
   3. c) filed audited accounts
3. 3. Check the corporate identity information obtained against the information held by HM Land Registry (company registration number and date of registration of the proprietor).
4. 4. Obtain evidence to check that the individuals signing on behalf of the company in the transaction is authorised to do so, through one or more of the sources below:
   1. a) check their details against the relevant company registry information
   2. b) check the validity and currency of any power of attorney
   3. c) obtain a copy of a company resolution appointing the authorised signatory or check against a current list of authorised signatories
   4. d) consult the company’s constitution or other relevant governing statute
5. 5. Carry out requirements 1 to 3 to verify the individual signatories’ identities.

Where a conveyancer has carried out the above checks and met the requirements in relation to an individual who is signing in multiple transactions, the conveyancer may rely on the results of those checks for a period of up to six months. If the signing occurs more than six months after the original checks were carried out, the checks will need to be completed again.

4. Achieving the HM Land Registry digital identity standard

Schedule 8 to the Land Registration Act 2002 (“the Act”) provides for compensation to be paid to a person who can show that they have suffered loss as a result of a mistake in the register on an indemnity basis. This includes where a fraudulent transaction is registered.

Under paragraph 10 of Schedule 8 to the Act, HM Land Registry has a statutory right to recover from conveyancers compensation paid by it in certain circumstances. This includes cases where compensation has been paid as a result of fraud.

A conveyancer who carries out the requirements set out above to achieve the standard should remain vigilant during the remaining course of the transaction.

If, at any time prior to the completion of the transaction, the conveyancer has (1) reasonable doubt about the checks they have conducted, or (2) has reason to believe the characteristics of the transaction itself indicate the parties they represent may not be genuine, then they should make further enquiries and seek further evidence, as appropriate, to ensure those doubts are removed. They must make a record of the results of those further checks and enquiries. Where there is reasonable doubt and it is not positively resolved, the standard will not be achieved.

It is acknowledged that it may not always be possible to conduct all the steps set out in the standard in every transaction. Where it is not practicable to carry out these enhanced checks, or resolve any doubts around the checks, the conveyancer will not reach the standard. In these circumstances, the conveyancer may remain at some risk of HM Land Registry seeking recourse if it turns out the transaction was indeed fraudulent and the conveyancer has been either negligent or fraudulent in relation to the checking of identity.

HM Land Registry gave an assurance to Parliament in 2001 that it would not use the right of recourse against those who are neither fraudulent nor negligent. HM Land Registry must satisfy itself that there has indeed been fraud or negligence before seeking recourse against a conveyancer.

5. Things to remember

We only provide factual information and impartial advice about our procedures. Read more about the advice we give.