COVID has been the main talk of the last year, dominating our lives for 15 months now. People in UK have experienced a nationwide lockdown 3 times already, with the last one only recently ending. Even with the recent easing of lockdown, Clients have either found it inconvenient to travel or have just preferred to stay at home, and understandably so. However, this has posed a challenge for many conveyancers when it comes to signing of Contracts, Transfers (TR1s) and other transaction deeds. Do we need the original wet-ink version of documents, or are electronic signatures accepted? What does the Land Registry accept?
Conveyancing has always been associated with a large amount of paperwork such as deeds, transfers, compliance certificates, power of attorney documents and the list goes on. It only makes sense that Conveyancing had to evolve and move forward with what technology can offer us. Allowing signing to be exclusively done manually would just not be time effective. In addition and when any human error occurred, as it inevitably does getting documents re-signed would only cause all parties involved more frustration. So, what is the current situation when it comes to signing documents electronically?
There has actually been legislation from as early as July 2016 on electronic signatures and related certificates. The Directive 1999/93/EC established a legal framework for electronic signatures and this was implemented into UK law under the Electronic Identification and Trust Services for Electronic Transactions Regulations 2016 (“eIDAS 2016”). The tricky part of eIDAS is the legal jargon used to define “electronic signatures”, “advanced electronic signatures” and “qualified electronic signatures”.
Electronic Signatures are the lowest in the ladder of security. It is a superficial mark which can be in the form of anything from a scanned image of a handwritten signatures to a name typed in an email or even just a squiggle in a box drawn on your iPad. The eIDAS Regulation clarified this is only acceptable when it comes to individuals, not corporate organisations.
Advanced Electronic Signatures (“AES”) are considered to be a much more secure type of electronic signature, that involves Public Key Infrastructure Technology, created using a cryptographic operation that creates a hash-code unique to both the signer and the content, meaning it cannot be copied or tampered with.
Qualified Electronic Signatures are essentially AES but created specifically by qualified creation devices that have Qualified Certificates issued by a qualified trust service provider, which would be regulated by the Supervisory Body.
The main problem with eIDAS regulations was that it did not specifically relate to conveyancing, it was largely targeted at whether those signatures would be admissible in court. Electronic signatures for HM Land Registry transaction documents are still not properly legislated and the ruling is not clear. On 9th July 2020, the General Counsel of the Land Registrar wrote in the HM Land Registry blog that they will soon start accepting witnessed electronic signatures and take the next steps to ensure that digital signatures can be used when working with HM Land Registry.
So, to put into practical terms, what signature should currently be used for a standard conveyancing transaction? If it’s a simple contract, you can use an electronic signature. This also generally applies for documents that do not need to go through the Land Registry. Common providers that are used for such signing are DocuSign or eSign (on Adobe Reader). For deeds or documents that will be submitted to the Land Registry, these have a particular requirement as to execution in order to be effective, therefore those strict formalities require the signature to be in writing. What has been widely accepted is signing “virtually” – where the solicitor sends the client the final version of the deed by email, and the client prints out the signature pages to sign in “wet-ink”. This is then usually posted back to the solicitors so that they hold the original wet-ink versions. This method means the client does not need to be physically present in front of the solicitor or conveyancer.
Until HM Land Registry implements new legislation to accept electronic signatures, “wet-ink” signatures will still be required on large for conveyancing transactions. Hopefully we see HM Land Registry implement new changes soon to keep up to speed with what is currently needed in the conveyancing world.