Room with a View – Execution of deeds – all change for the Land Registry
8 January 2021
For the most part, a legal interest in land can only be transferred or created by deed. A deed must be in writing, and to be validly executed by an individual, they must sign in the presence of a witness.
The witness must be physically present when the deed is signed. Only then and once completed can it be registered with HM Land Registry (HMLR).
The current climate
As 2020 progressed we saw two main problems with the valid execution of deeds: the ability to put a traditional manuscript (‘wet’) signature on a deed where both lawyers and their clients are operating remotely, and the availability of appropriate witnesses.
The emergence of COVID-19 – and consequent lockdowns – has impacted on people’s ability to attend their usual workplace, have access to printing or scanning facilities and even the ability to be in proximity to others so that the requirement for a physically present witness can be met.
Even in these times it remains a requirement for a witness to be physically present during the signing of a deed. Although technology may exist to allow remote witnessing (e.g. by video call) when the Law Commission considered the point in 2019, they concluded that specific legislation was required to make this lawful. This is something which has been tackled in other areas (e.g. wills) but does not yet exist for ordinary deeds. It is acceptable for a signatory and witness to have some physical distance between them (they can be separated by a window), as long as the signatory can clearly be seen signing the deed.
Another challenge is over who can be a witness. While the law does not prevent a spouse, civil partner or co-habitee from being a witness (so long as they are not also a party to the deed) it is best avoided. But that is easier said than done where an individual’s ability to see anyone, other than the immediate family with whom they live, is restricted.
While the logistics of organising a witness in a way so as to satisfy safety needs (and whatever law/rules/guidance around social distancing may be imposed by government at the time) are achievable, the more difficult aspect of the process must be the conveyancer’s ability to obtain a validly executed deed so as to satisfy HMLR’s registration requirements. One of the fortunate side-effects of recent global events is a re-appraisal by HMLR of their own execution requirements to enable property transactions to proceed. Two, alternative paths to signing deeds have now begun to emerge.
Scanned manuscript signatures
HMLR will, for the purposes of a registration of a transfer and certain other deeds, currently accept a scanned manuscript signature being added to the final version of the deed. The process for obtaining a validly executed deed by this method will look something like this:
- final copies of the transfer will be emailed to each party by their conveyancer
- each party prints the signature page and signs in the physical presence of a witness
- the witness signs the signature page; and
- each party sends a single email to their conveyancer attaching the final agreed copy of the document(s) and a PDF/JPEG of the signed signature page.
The electronic copies contained in the email attachments are then treated as the digital equivalent of an ‘original’ document which can then be dated and submitted to HMLR for registration.
While this is currently likely to be the preferred method for execution of deeds it does presuppose that the signatory has access to email and a printer as well as the means to scan/photograph the signed pages (which might also include coloured plans). Quite often there is an element of urgency in getting deeds executed — once they are in agreed and final form — so as not to jeopardise a transaction or agreed completion dates. Our recommendation is, in any event, that matters are discussed early on so that for each transaction the conveyancers and their clients know sooner rather than later what hurdles there might be to obtaining witnessed signatures and so that those issues can be addressed before they become a potentially insurmountable last minute problem.
HMLR have recently changed their practice guidance to allow certain deeds (such as transfers) to be signed electronically. By ‘electronic signature’ we mean one that is applied via recognised electronic signature software. HMLR requires that all parties must agree to the use of electronic signatures, and the platform to be used. Save in limited circumstances all parties must have a conveyancer acting for them. A conveyancer must be responsible for setting up and controlling the signing process. The conveyancer with such responsibility must:
- upload the final agreed version of the deed on to the agreed platform
- insert the name, email address and mobile phone number of the signatories and witnesses; and
- highlight the fields that need completing within the deed and indicate by whom they are to be completed and in what order.
The platform then emails the signatories to let them know the deed is ready to sign. The signatories will use a password sent to them by text message to gain access to the deed where they must then sign (electronically) in the presence of a witness. The witness will receive an email asking them to sign in (using a password sent by text by the platform) and add their details. The controlling conveyancer then dates the deed within the platform and submits their application for registration to HMLR with a prescribed certification.
On the one hand, electronic signatures overcome the practical issues around using scanned signatures, and largely do away with the need for paper at all. However, that is not to say that they are not without their challenges:
- the need for witnesses to be physically present at the point of signing is the same, notwithstanding the signature itself is electronic. Corporates can avoid the issue by executing deeds using two corporate officers, but this is hardly an improvement in the overall process
- the various signers will need to be prepared to hand over e-mail and mobile phone numbers which are retained in a digital ‘proof of signing’ certificate which is made available to the lawyers during the signing process. Some will feel uncomfortable with the privacy implications of this.
Regardless of the HMLR position, not everyone has embraced the idea of e-signatures. In particular, some lenders are reluctant to accept them as they cannot be easily compared against a wet ink bank mandate
- HMLR’s own requirements for ‘valid’ e-signed deeds are both complex, and prescriptive. No deviation from their standard process is allowed, and in some circumstances it will simply not be possible to use e-signatures. Even digital signing platforms themselves are struggling to comply with HMLR requirements, or do so in a way that allows privacy and other issues to be adequately covered off.
It is fair to say that we have come a long way in a very short space of time. Paper (and the ink on it) is unlikely to be going away in the short term, and in many cases is actually a more convenient way of transacting. On the other hand, having now started on this ‘digital track’ HMLR is already exploring next-generation technology including bringing together digital identity checking with digital signatures to create more ‘fraud-secure’ conveyancing processes. Watch this space…
This article is from the winter 2021 issue of Room with a View, our newsletter aimed at professionals within the property industry. To download the latest issue, please visit the newsletter section of our website. Law covered as at January 2021.
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The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at January 2021.