Blog - 16/07/2020
Step by step – electronic signatures update
At the beginning of the pandemic I wrote about the difficulties faced by conveyancers and their clients in getting documents physically witnessed. The general rule is that a witness has to physically witness the original signatory (please see our previous update).
Over recent months we have heard stories of witnesses peering through windows to watch a signatory and then the document being passed through the window for the witness to add their details. Social distancing was being maintained and the document is correctly witnessed.
To this effect some progress has been made with the Land Registry, who since May 2020, has started to accept digital copies of documents by way of scans to facilitate registration, this notwithstanding no wet ink copies, only scanned copies, have been produced to the lawyers. This has been a significant help to conveyancers to ensure that documents have been capable of registration even though most of our offices have been for all intents and purposes closed.
I recently encountered a situation whereby I was acting for a Landlord granting a Lease and the Tenant’s solicitor confirmed that the Lease would be signed electronically by the Tenant (a Company) electronically. The Lease as drafted anticipated a signatory by a single director whose signature will be witnessed. The Tenant’s solicitor subsequently confirmed that the Lease would be physically signed and witnessed. I had however ascertained in the interim that an electronically witnessed signature could only electronically be witnessed if both parties were in the same room. Whilst the Lease would have been validly executed, it would not have been accepted by the Land Registry for registration purposes.
There is little doubt for the property industry that electronically signing documents will be a big part of the future of the conveyancing process. With this in mind and no doubt prompted by the current pandemic the Land Registry has stated that it intends to start accepting witnessed electronic signatures in due course and to this effect, has published draft practice guidance setting out the circumstances in which it would accept electronic signatures.
The proposals are as follows:
- There is no particular signing platform put forward by the Land Registry as long as its specific requirements are met.
- Both parties have unilaterally agreed to use electronic signatures in the transaction in question.
- Both parties have to be represented and a conveyancer has to be responsible for setting up the procedure. That conveyancer will be responsible for controlling the signing process including uploading the agreed documents to the relevant platform that is going to be used by the parties. This includes populating the relevant platform with the name, email address and mobile phone number of each signatory and witness.
- The signature process is then dealt with by the platform emailing the signatories and providing them with a one time password (OTP) much in the same way many of our banking transactions operate. Notwithstanding this process the witness still has to be physically present to witness the original signatory sign the document. The witness will only receive their OTP once the main signatory has signed the document. All OTPs will be time coded by the platform.
- It is then anticipated that the conveyancer will also date the document within the platform and that is the document which will be sent to the Land Registry as appropriate.
The draft guidance has invited comments on its proposal by the 18 July 2020 and so we can expect there will be further progress on this. Whilst it is encouraging that progress is being made there still remains the fact that witnesses still need to be physically present. The past three months has taught us all that there are new ways of working and it is not entirely clear why documents can not be witnessed via Skype or Zoom or any of the other similar platforms which are now available. Perhaps that will come in time but at least matters are moving forward step by step.
If you have any queries about this topic, please contact Clayton Beerman or any member of the Property team.
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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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