I have previously written about how real estate transactions can make use of electronic signatures. When I first wrote about this topic in March 2020 (click here to view) I envisaged that this would be a temporary fix to help us deal with transactions whilst we were working from home. Nine months later it is now becoming the new norm.
The use of electronic signatures was always going to be the future but the pandemic has hastened its introduction into the mainstream. It is encouraging that the profession is now embracing the use of electronic documents without question or suspicion. As such The Law Society has now addressed the most common queries in a user friendly Q & A format. They have set out various scenarios which have presented themselves when signing or witnessing documents electronically and associated topics.
The Law Society has stressed that this Q & A is not law but it is certainly a helpful guidance for lawyers who may have questions as to whether suggested ways of proceeding are valid. Regrettably for Real Estate practitioners there is no comment on the witnessing of statutory declarations.
The main points can be summarised as follows:
- When witnessing a document the witness has to be physically present. In the days of social distancing this can include looking through a window at a signatory and then adding the signature afterwards. This is a confirmation of the previous position and witnessing via a video link is still not permitted.
- A witness can be a family member of the signatory as long as that witness does not personally benefit from the document. Ultimately when making the decision as to who should be the witness, the witness should be someone whose evidence can be relied on should the document or deed be challenged.
- One exception to physical witnessing is with regard to Notaries. If the person is known to the Notary then the signature can be witnessed even though the Notary was not physically present when the document was signed.
- There is a reaffirmation that electronic documents can be signed in four ways. These are the typing of a name in a contract or in an email containing the terms of that contract, the pasting of an image of the signature, a web based electronic document, or physically using a finger, light pen or stylus and a touchscreen to insert the name electronically in the appropriate place for that signature.
- Where a Company is executing a deed by the signature of two directors or by a director or secretary, the document will be valid if those signing parties each sign a separate counterpart. However, this is not the case where the Company executes by way of a seal where both directors need to physically witness the seal being affixed.
- A combination of execution methods is acceptable provided that each party uses a valid signature method. In other words one signatory can sign electronically and another party can sign by way of wet ink. There can be multiple originals of a document in both electronic and hard copy form where this does not conflict with other legal requirements. Owing to the potential confusion of using this method, we recommend multiple versions are used as a last resort where there are no other options.
- There are no confirmatory statements required in documents to confirm their validity. It should however be remembered that if the document needs to be registered at the Land Registry then evidence of the signing and witnessing of any electronic documents is required. This is set out in the Land Registry Practice Guide 8 which can be found here.
The Law Society Q & A also addresses board resolutions and articles of association and a full copy of the document can be found here.
In conclusion, this is a helpful guidance for practitioners as access to the office is not likely any time soon and further updates are sure to follow in the coming months.
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Please note that this blog is provided for general information only. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content of this blog.
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