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Digital signatures in conveyancing - the way forward?

View profile for Harvey Gibbs
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Digital signatures in conveyancing – the way forward?

Since July 2021 the Land Registry has been prepared to accept electronic signatures as a means of executing deeds in conveyancing transactions. The concept of electronic signatures was not however new and in fact had been advocated for some time by many in the property sector as a means of making the conveyancing process more efficient.  However, it was of course the onset of the first COVID19 lockdown which brought the concept into sharp focus. This prompted the Land Registry to commence a relatively fast consultation with others in the sector, such as conveyancers, mortgage-lenders and estate agents, and thereafter produce details of the requirements. It is therefore now possible to deal with a property sale or other property transaction without the need for a paper document to be printed and signed.

Various deeds can be signed electronically, but I am focusing here on the sale of a property.

The Land Registry requirements are very strict, and I briefly set them out as follows:

1. Both the seller and the buyer must agree to the use of electronic signatures, and an electronic signature platform which will manage the electronic signing process, in relation to the deed that is to be signed. Unless both parties agree neither of them can use an electronic signature.

2. Both the seller and the buyer must be represented by conveyancers. Accordingly, if either party is unrepresented electronic signatures cannot be used by the seller or the buyer.

3. A conveyancer must be responsible for managing the signing process through the platform.

4.The following steps for signing and dating the deed must be taken:

  • STEP 1 – The conveyancer who is managing the signing process must upload the deed (including any plans) to the platform, provide the details of the parties who will be signing and highlight the fields that need to be completed and by whom.

 

  • STEP 2 – The platform will then email the parties to let them know that the deed is ready to sign.

 

  • STEP 3 – In order to access the deed on the platform the parties are required to input a one time password (which will be sent to them by text message from the platform).

 

  • STEP 4 – The parties then enter the password and sign the deed in the physical presence of their witness.

 

  • STEP 5 – Once the deed has been signed, the witness will also receive an email from the platform with a request for them to sign. The witness then inputs a one time password (which again will be sent to them by text message from the platform), signs and adds their details.

 

  • STEP 6 – Finally, the conveyancer who is controlling the signing process will date the deed within the platform with the date it took effect.

5. Following completion of the sale, the buyer’s conveyancer lodges an electronic application with the Land Registry for the registration of the buyer as the new owner of the property, and the application must include a PDF copy of the completed deed.

6.When lodging the application with the Land Registry, the buyer’s conveyancer must include a certificate (which can be given either by them or the seller’s conveyancer) confirming that the above requirements for the execution of the deed using electronic signatures have been satisfied.

 

Will electronic signatures speed up the conveyancing process? Clearly in cases where one of the parties is, for example, living abroad, the option of being able to sign the sale deed with an electronic signature should drastically cut down the time that it might otherwise take to get a paper version of the deed with a “wet” signature back to the conveyancers. However, electronic signatures will not of themselves speed up the process as the signing of the documents is a small (albeit very important) part of the process, and they will have no bearing on the time taken with searches, enquiries, mortgages and chains of transactions.

Electronic signatures will not appeal to everyone and no doubt there are many parties and conveyancers who will still prefer a written signature on a paper copy of a deed. As I have mentioned above, unless both conveyancers in the transaction agree, electronic signatures cannot be used. It may also be the case that not all mortgage lenders will accept a deed which has been signed with an electronic signature and will still insist that their mortgage deed must be signed personally in the presence of a witness (who may be required by the lender to be a solicitor).

However, the Land Registry would like to go further and introduce “qualified electronic signatures” in due course as they are potentially more secure and will remove the need for witnesses. Further developments in this field will therefore be awaited by those in the property sector with interest.

For advice about electronic signatures in conveyancing transactions, please contact me on 02476 999399 or another member of the Feldon Dunsmore team.

Author: Harvey Gibbs

14 May 2021