VIRTUAL REALITY: HM LAND REGISTRY’S RELAXATION OF THE RULES ON THE EXECUTION OF DEEDS

HMLR will now be accepting witnessed electronic signatures for deeds effecting property transactions.

Due to the risks and implications associated with conveyancing transactions, the practice seems to advance into the digital era at a snail pace.  However, HMLR has finally discarded the last requirement for hard copy deeds in recognition of increasing utilisation of online platforms for property sales, expectations around a more efficient conveyancing process and to support remote working practices.

Property conveyances must be made by deed, which requires not only a party’s signature but also the witnessing of this signature by an independent third party (or, in the case of companies, the signatures of two directors, or one director and the company secretary, or by way of affixing the company seal).  Previously, HMLR has insisted that deeds submitted for registration must be certified copies of entire original documents (i.e. not only signature pages) comprising ‘wet ink’ signatures.

HMLR has updated its guidance so that both the authorised signatory and the witness can execute and attest the document using an electronic signature.  However, the Law Commission is not satisfied that a witness’ ‘virtual’ or ‘remote’ presence is sufficient.  Accordingly, it remains a requirement that the witness is physically present when the authorised signatory inserts their electronic signature into the deed on screen.  While this requirement presents a hurdle in the context of Covid-19 and remote working, it is still a positive step towards a more efficient conveyancing process.

‘Electronic signature’ is a simple replacement of a ‘wet ink’ signature.  HMLR’s guidance aims to mitigate the risks associated with the convenience of digital deeds by detailing a process that must be followed, including the use of secure online platforms that record authentication checks. In future, HMLR hopes to replace this method with Qualified Electronic Signatures (an electronic signature based on a qualified certificate). Qualified Electronic Signatures will be produced by regulated ‘qualified trust service providers’ and benefit from added security and joined-up and automated processing.  Therefore, Qualified Electronic Signatures will become the future method of digital signing and should dispense with the additional procedural requirements contained in HMLR’s current electronic signature guidance.

If you have any questions around HMLR’s requirements for executing deeds or would like further information about the electronic signing process in conveyancing transactions, then please get in contact with a member of our Real Estate team, who will be happy to help.

This article is for general awareness only and does not constitute legal or professional advice. The law may have changed since this page was first published. If you would like further advice and assistance in relation to any of the issues raised in this article, please contact us today by telephone or email enquiries@sharpepritchard.co.uk.

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