Electronic signatures in Conveyancing
At the end of July, the Land Registry introduced new guidance confirming their acceptance of electronically signed documents by the general public. This is their latest progress in a move towards electronic conveyancing and is a large change towards the way in which the documents in a conveyancing transaction can now be executed.
Prior to this move, a "wet signature" was required to all Deeds for the Land Registry to accept the same.
There are now two methods of electronic signature that are accepted by the Land Registry, which are as follows:
- Documents can be emailed to the parties for the signature page to be printed off, signed and witnessed manually, then scanned back to the Conveyancer. The Conveyancer then compiles the document and submits this to the Land Registry ("Mercury execution"). In this method, the signature and witnessing of a document is the same as it was previously; it is simply the process in which the document is produced that differs.
- Alternatively, documents can now also be signed by way of electronic means, via an electronic signature platform ("Electronic execution"). When using this method, both the parties to the Deed (and the witnesses) will be able to sign the same document electronically.
There are strict processes that the Land Registry have set out, that must be adhered to, in order to allow signatures to be carried out in either of the above methods. Whichever method is chosen must first be accepted by all parties before proceeding to execute the documents and therefore it is not a decision that one party can solely make.
Although the process seems to bring the conveyancing procedure into a more digital world, the Land Registry have clearly stated in their guidance (updated Practice Guide 8) that they will accept signature by these methods "for the time being" and "until further notice". Therefore, whether these methods are to be utilised continually or just during the pandemic is currently unknown.
While the introduction of these methods is advantageous to progressing the conveyancing transaction, the onus is placed on firms to alter their processes, particularly in respect of Electronic execution, as there is no guidance on any platforms that may be suited to meet the requirements of the Land Registry.
It is therefore expected that the Mercury execution will be favoured until firms have such wider systems in place.
That being said, there is not currently any indication from the UK Finance Mortgage Lenders as to whether they will be willing to accept either of these methods of execution. As such, where there is a Mortgage Deed which also requires execution, it may be that "wet signatures" are still obtained, for ease of having the purchasing party signing all documents at once.
It may therefore be some time before these processes are widely operational.
For further advice and assistance then please contact:
Victoria Faulkner - Chartered Legal Executive - Residential Property