The deed is done! Electronic signatures accepted by HM Land Registry
eSignatures & Land Registry
One of the more regular questions we have received from customers since we started Signable is whether eSignatures can be used to execute deeds. And unfortunately, it has been one area HM Land Registry (HMLR) has been reluctant to update, despite the industry’s need for modernisation.
That is until recent events saw the country go into lockdown, forcing a new approach to traditional methods. One which is a long-overdue development in helping businesses reach their goals of achieving paperless processes. As well as implementing long-term secure practices for completing transactions.
In light of lockdown, The Law Society recently reviewed their practice note; “execution of a document using an electronic signature”, in May 2020. Followed by The Law Commission echoing this move and updating its “electronic execution of documents review”. And now? It is of the opinion that an electronic signature may be used to execute a deed.
However, this is provided that the deed is in writing, the signature is inserted in the deed in order to authenticate it, and the signature is witnessed as required.
HMLR confirmed these changes by announcing that until further notice witnessed electronic signatures are now accepted for certain registrable deeds. This is a huge development in legal practices for real estate in both England and Wales.
Simon Hayes, chief executive and chief land registrar at HM Land Registry has said:
“What we have done today is to remove the last strict requirement to print and sign a paper document in a home buying or other property transaction. …. This should help right now while lots of us are working at home, but it is also a keystone of a truly digital, secure, and more efficient conveyancing process that we believe is well within reach.”
How will eSignatures for Land Registry work?
- The Land Registry will only accept electronic signatures created using electronic signature platforms;
- To use electronic signatures, all parties must be represented by a conveyance;
- Section 13.4 of the Practice Guide sets out the documents that can be signed electronically;
- Not only must all parties be represented by a conveyancer, but it must also be a conveyancer that uploads the documents onto the signing platform and controls the signing process;
- All signatories and witnesses must be subject to two-factor authentication. In practice, this means that contact with them will not be just via email (as the platform contacts signatories and witnesses by email) but will also be by way of a one-time password sent to them by text message. That password must contain a minimum of six numbers;
- Where witnesses are involved, conveyancers must be satisfied that they were physically present to witness the signatory sign. The most likely solution to this will be the inclusion in documents of a statement to be signed by the relevant witness confirming that they were indeed physically present and saw the signatory sign;
- The conveyancer submitting the electronically signed document to the Land Registry for registration must also certify that, to the best of their knowledge and belief, the Land Registry’s requirements for the execution of deeds using electronic signatures have been satisfied; and
- The parties’ conveyancers are advised to retain with their conveyancing file a copy of the completion certificate or audit report produced by the electronic signature platform at the end of the signing processes
The main detail to note in regard to this change is the difference between “qualified electronic signatures” and an “electronic signature”. Electronic signatures are inserted into documents, acting as a simple replacement of a wet signature. And a qualified electronic signature is defined, more in line, with digital signatures. Which are the next focus for HMLR to look at to consider accepting as, due to the processes tied to digital signatures, makes them a more secure method of signing.
Both, however, are still beneficial alternatives for businesses to adopt. As explained by Mike Harlow, Deputy Chief Executive for HMLR:
“We believe that a number of businesses that currently provide electronic signatures to other sectors, should be able to quickly meet these criteria. On top of the other practice changes we have already introduced, this should provide conveyancers with immediate help in meeting the difficulties of working with paper in the current crisis”
Well, firstly it’s a win for eSignatures and Land Registry. Secondly, with these adaptations in mind, it is clear to see that electronic signatures are to become more and more commonplace as we progress, which will allow for the eSigning industry to start adapting the needs of conveyancing. Ensuring that the property sector, and the transactions concerning it, benefit from the successes other industries have seen over recent years.
As Harlow sums up:
“We believe Qualified Electronic Signatures are the right long-term component of that digital future. They have added security and the digital nature of the resultant document will enable joined-up and automated processing elsewhere in the transaction.”