One of the more regular questions we have received from customers since the beginning of lockdown has been whether we could accept electronic signatures (on things like a deed transferring land) instead of it being signed with a pen – a ‘wet-ink’ signature. At a time when most of us are working from home, printing, posting and scanning can be a pain.
This is why we will soon start accepting witnessed electronic signatures and then take steps to ensure that digital signatures (more specifically Qualified Electronic Signatures) can be used when working with HM Land Registry.
What is meant by ‘electronic’ and ‘digital’ signatures?
There are basically two generally recognised forms of electronic signature. The first, which I will call an ‘electronic signature’, is a simple replacement of a wet signature. So, a deed that has to be signed by the person ‘doing the deed’ and a witness can be electronically signed by both.
The second type is what I will call a ‘digital signature’ and is legally a different thing altogether, with its own requirements. Digital signatures are more secure because there is a process preceding them that positively identifies the signatory and the resultant document is encrypted so that it cannot be altered. This balances the fact that a witness is no longer required.
Digital signatures in land transactions have been legally enabled since the Land Registration Act 2002. There are two main types of digital signature: Advanced Electronic Signatures and Qualified Electronic Signatures. Somewhat confusingly, Advanced are not as advanced as Qualified and Qualified are only qualified in the sense that service providers need to be qualified – they are regulated in the UK by the Information Commissioner’s Office. They are both more attractive in comparison with simpler electronic signatures given the added security they offer.
Qualified Electronic Signatures were once a bit clunky to use and impracticable for one-off use, such as in a house transaction. But advances in technology mean the user journey is now seemingly little different from Advanced Electronic Signatures. Moreover, the standards that ‘qualified trust service providers’ have to meet in order to be regulated providers of Qualified Electronic Signatures underpin the confidence we can all place in them – over and above the somewhat looser definition of an Advanced Electronic Signature.
As keeper of the Land Register, we need to be sure that not only has a document been signed in a way that would give it proper legal effect, but also that the process was secure and the risk of fraud minimised.
Our next steps
In the early stages of the coronavirus lockdown we brought together a group of representatives from regulators, trade bodies, conveyancers, lenders and estate agents to discuss the immediate issues of working during lockdown. We also wanted to explore how the solutions we find to our current problems could benefit conveyancing in the future. We have discussed when and how we should approach electronic and digital signatures and the group has helped us immensely with the early stages of our planning. We have also conducted extensive research of the market in electronic and digital signatures and believe that, with some safeguards, we can accept both witnessed electronic signatures and Qualified Electronic Signatures.
We have today issued draft practice guidance setting out the basis on which we would accept electronic signatures. We would welcome any comments you might have before 18 July [Update: the feedback form is now closed. Thank you to those who provided feedback].
We believe that a number of businesses that currently provide electronic signatures to other sectors, should be able to quickly meet these criteria. On top of the other practice changes we have already introduced, this should provide conveyancers with immediate help in meeting the difficulties of working with paper in the current crisis.
But this is not just about the here and now.
It is obvious that the more digitally advanced sectors are those that have thrived in the last few months. Conveyancing is not one of those. It has some digital components, but they need to be joined up. Achieving a long-term, sustainable and secure means of signing property transactions would be a significant component of a wholly digital conveyancing process.
We believe Qualified Electronic Signatures are the right long-term component of that digital future. They have added security and the digital nature of the resultant document will enable joined-up and automated processing elsewhere in the transaction.
In the next few weeks we will issue our practice note on how Qualified Electronic Signatures may be used.
Our hope is that in the near future Qualified Electronic Signatures become more commonplace and the service providers tailor their use to conveyancing. If they do develop to be a successful option for completing property transactions, we will review the use of electronic signatures and may withdraw their acceptance, which would leave only the more secure Qualified Electronic Signatures in use.
Allied to electronic signatures is the question of how to identify people securely and digitally. We have had a fantastic response to my last blog on that subject and look forward to supporting the industry as it develops a means of using cryptographic biometrics as another foundation of efficient, digital and secure means of conveying property. We will be hosting a series of virtual events at the end of the month to discuss how best to move forward with conveyancers and service providers, and we will update you once these have taken place.
I must thank the cross-section of conveyancers and other industry bodies represented on the HM Land Registry Industry Forum who have supported us in our assessment of electronic signatures and our general hunt for a silver lining among the current clouds.