healthcheck-step-1 Created with Sketch. 1 image/svg+xml
Business, taken personally.

Electronic signatures: introducing tech to property transactions

Posted by Anna Aldred on 24th November 2020

In July, the Land Registry (LR) announced that it will start to accept electronically signed deeds used for registrable transactions such as transfers and leases, provided they have been signed using a commercial electronic signature platform such as DocuSign. This is intended to assist whilst Covid-19 restrictions are in place, but will no doubt continue once those are relaxed.

However, whilst this may be useful in some limited circumstances, it is not clear how widespread it’s use will be – the new electronic signature process is still very much in its early stages of development, and not widely used by law firms. This is what we know so far:

Key factors
  • Conveyancers are responsible for managing the signing process – it may take conveyancers some time to get used to the new process.
  • Witnesses still need to be physically present when the document is signed and conveyancers need to be satisfied with this. The LR has advised that conveyancers produce a statement to be signed by witnesses to confirm they were indeed present, as additional evidence.
  • The LR has confirmed that as long as the main parties are represented, the following do not need a conveyancer to act for them: a lender (in the case of a discharge or release), a personal representative (in the case of an assent) or a donor (in the case of a power of attorney).
  • If using DocuSign, the signatories need to have access to their emails and mobile phone. The parties will need their phone to access a one-time password via text message. The password lets the parties into the document to sign. Other platforms will no doubt have similar security features.
What is accepted?

Until further notice, the LR will accept the following deeds that have been signed electronically in accordance with its requirements

  • A deed that effects one of the registrable dispositions referred to in sections 27 (2) and (3) of the Land Registration Act 2002 – eg. a transfer of title;
  • A discharge or release of a legal charge/mortgage in form DS1;
  • Equivalent deeds in respect of unregistered land;
  • An assent (to transfer title to the property as required by a Will) of registered or unregistered land; and
  • A power of attorney other than a lasting power of attorney.
What are the risks?

Most legal professionals believe this relaxation of the rules by the LR is a step towards achieving modern transaction practice and could be particularly helpful in the current circumstances when having several people present at the same place is more difficult than usual. However, there are some potential risks that conveyancers will need to consider:

  • Witnesses are likely to get a copy of the documents, so signatories need to be careful as to who they choose to witness.
  • Witnesses still need to be present in-person to attest the signatures.
  • There may be additional risks in relation to identity fraud.

It will be interesting to see how this new process develops and is implemented. We will be sure to let our clients know when we are satisfied that the risks can be managed sufficiently for us to be confident that our clients’ interests will be protected in using it! Until then, we will keep a watching brief.

Share this post: