It appears that the current Covid-19 crisis has convinced HM Land Registry (HMLR) to embrace technological change, and start accepting witnessed electronic signatures. So, are “wet-ink” signatures going to become a thing of the past in property transactions, and how will this work in practice?
Up until now, HMLR has not accepted the registration of transfer deeds or other forms of dispositionary documents that have been electronically signed, but have now indicated that they will do so. Draft guidance, setting out the basis on which HMLR will eventually accept electronic signatures, can be found here.
HMLR’s draft requirements are as follows:
- All the parties must agree to use electronic signatures and the use of an electronic signature platform (Platform).
- All parties are represented by conveyancers.
- A conveyancer sets up and controls the signing process through the Platform.
- The signing and dating process is:
Step 1 – The conveyancer controlling the signing process:
- Uploads the final agreed copy of the deed (plus plans) to the Platform;
- Populates the Platform with the name, email address and mobile number of the signatories and witnesses;
- Identifies the fields that need completing within the deed and indicates who they need to be completed by and in what order.
Step 2 – The Platform emails the signatories to let them know the deed is ready to sign.
Step 3 – Signatories are required to use a one-time password (OTP) sent to them by text message by the Platform to access the deed.
Step 4 – Signatories enter the OTP and sign the deed in the physical presence of the witness, with the date and time being automatically recorded by the Platform.
Step 5 – Having observed the signatory sign the deed, the witness will receive an email from the Platform inviting them to sign and add their details in the space provided. The witness also inputs an OTP, signs and adds their address in the space provided, with the date and time being automatically recorded. The witness must sign at this stage, so that their signature and the signatory’s are contemporaneous.
Step 6 – Once signing has concluded, a conveyancer dates the deed within the Platform.
- The conveyancer who lodges the application does so electronically, including a PDF of the completed deed with the application (first registration applications will differ slightly).
- The conveyancer lodging the application provides the following statement: “I certify that, to the best of my knowledge and belief, the requirements set out in Practice Guide 8 for the execution of deeds using electronic signatures have been satisfied.”
If one party to a deed wants to sign in wet-ink and another electronically, the deed can be created in counterparts. Parties can also use different Platforms provided that the requirements set out above are observed.
This development follows on from the temporary changes that HMLR made in May 2020 as a result of Covid-19, one being that HMLR will, until further notice, accept transfers or other dispositionary deeds that have been signed using the "Mercury signing approach”.
All in all this is a very welcome, and much overdue, development.
It is obvious that the more digitally advanced sectors are those that have thrived in the last few months. Conveyancing is not one of those. It has some digital components, but they need to be joined up. Achieving a long-term, sustainable and secure means of signing property transactions would be a significant component of a wholly digital conveyancing process.