Electronic Signatures to speed up property transactions

During this pandemic, HM Land Registry has come to realise that it is behind the curve in relation to technology and the ability to accept documents which are signed electronically.

The Deputy Chief Executive and Deputy Chief Land Registrar have however announced that witnessed electronic signatures will soon be accepted, and they will be taking steps to ensure that digital signatures will be too.

This move has been decided following the many questions from customers since the start of lockdown as ‘at a time when most of us are working from home, printing, posting and scanning can be a pain’.

An electronic signature is a simple replacement of a wet-ink signature (by pen). For example, a deed that would need to be signed by the person (whom the deed is for) and a witness could be signed electronically by both.

A digital signature is legally different and has its own requirements. This is more secure, as there is a process that will positively identify the signatory, and the resultant document will be encrypted so that is cannot be altered. The result of a digital signature is that a witness is no longer required, due to the level of security in the process of signing.

Digital signatures have been legally allowed since the Land Registration Act 2002.

There are two main types: advanced electronic signatures and qualified electronic signatures.

Both of these are regulated in the UK by the Information Commissioner’s Office and offer more security than the simpler electronic signatures. A qualified electronic signature requires that the service providers are qualified and viewed to be more secure than the advanced signature. The qualified trust service providers have to meet certain standards to be regulated providers, to underpin confidence in their use, and accuracy over and above the advanced.

The Land Registry needs to ensure that not only is a document signed in the correct way to give it proper legal effect, but also that the process was secure and the risk of fraud was minimised.

From discussions with representatives in the property buying sector, from conveyancers to estate agents, the Land Registry believes that, with some safeguards, it can accept witnessed electronic signatures and qualified electronic signatures.

The Land Registry has provided a draft practice guidance that sets out its requirements before electronic signatures are accepted.

These are:

  1. All parties agree to the use of electronic signatures.
  2. All the parties have conveyancers acting for them.
  3. A conveyancer is responsible for setting up and controlling the signing process through the platform.
  4. The conveyancer who lodges the application does so by electronic means and includes with the application a PDF of the completed deed. However, where the application is for first registration, a printout of the PDF, certified to be a true copy of the completed deed, can be lodged.
  5. The conveyancer lodging the application provides the following certificate: “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.”

The Land Registry has noticed that the more digitally-advanced sectors are those that have excelled in the last few months, and that achieving a long-term, sustainable and secure means of signing property transactions would be a significant component of a wholly-digital conveyancing process.

The Land Registry believes that qualified electronic signatures are the right long-term component of that digital future.

We await for the new practice note on how qualified electronic signatures may be used, so we can fully understand the Land Registry’s requirements and process for electronic signatures. We believe that the adoption of this technological advance will assist our commercial and residential property departments to conclude transactions in a fast and safe manner.

How we can help

If you need assistance with any property related enquiries, please contact our experts on 0161 330 6821 or email direct:

Paul Westwell at p.westwell@bromleys.co.uk

Martin Blaylock at mblaylock@bromleys.co.uk

Amie Carey at acarey@bromleys.co.uk

Beverley Pretl at bpretl@bromleys.co.uk