Electronic signatures on property documents: HM Land Registry updated Practice Guide

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Article

31 July, 2020

The unprecedented circumstances brought by the global Covid-19 pandemic has meant that processes and procedures across all sectors have had to change in some way, shape or form, to address the challenges presented. Inevitably, many businesses have embraced these changes quickly to ensure business operations can continue to some level under the "new normal".

A key consequence of the pandemic within the legal industry has been the increased prevalence of the use of electronic signatures for the execution of documents, and there are signs that this will lead to more long-term changes on how documents are executed in a post-pandemic world.

One previous obstacle to the wider electronic signing of documents was that certain bodies, such as the Land Registry, generally did not permit electronic signatures for many deeds that were required to be submitted for registration.

However, this week, on 27 July 2020, the Land Registry updated its guidance on execution of documents to confirm that they will now accept electronic execution of transfer deeds and certain other deeds "until further notice" provided that their requirements are satisfied.

So, what does this mean in practice?

Deeds that can be signed electronically

The Land Registry has confirmed that the following documents can now be signed electronically:

  • Any deed that is required to be registered to take effect (this includes property transfer deeds, registrable leases and legal charges);
  • A discharge or release of a registered charge;
  • Equivalent deeds in respect of unregistered land;
  • An assent of registered or unregistered land; and
  • A power of attorney other than a lasting power of attorney.

The Land Registry's requirements for electronic signing

The Land Registry have set out a specific process that must be followed in order for the electronic signing to be valid:

  1. All of the parties must agree to the use of electronic signatures and to the use of an electronic signing platform;
  2. All of the parties must have conveyancers acting for them;
  3. A conveyancer is to be responsible for setting up and controlling the signing process through the platform;
  4. All signatories and witnesses are emailed and also sent a 'one-time-password' (OTP) (minimum of six numbers) by the platform for purposes of electronic execution and attestation; and
  5. The conveyancer lodges the application with the Land Registry.

It is possible for a document to be executed by some parties by way of a wet-ink signature and by other parties with an electronic signature.

Witnessing of signatures

For attestation purposes, the Land Registry still considers it unsafe to accept any form of witnessing other than physical witnessing. Therefore, any witnessing of documents must be in person. Remote witnessing (such as via a video link) remains prohibited for both electronic and wet-ink signatures.

Comments

Given the technological capabilities now available to sign, attest and deliver documents, it was perhaps only a matter of time until the Land Registry moved closer to virtual means - albeit this appears to be a temporary measure in view of the circumstances. However, as we shift more and more towards a virtual world, it may be likely that electronic signing stays beyond the pandemic - the "new norm" which could eventually replace the pen on paper custom, transforming the Property sector. Temporary or permanent, it is a move which will be welcomed by property professionals as providing more flexibility when it comes to effecting property transactions.

In light of the Land Registry update, businesses are advised to be mindful of the required execution formalities in transactions and to comply with procedures relating to electronic execution by following the guidance issued.

For more information contact Helen Marsh in our Commercial Property department via email or phone on 01254 224217. Alternatively send any question through to Forbes Solicitors via our online Contact Form.

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