As announced in our news story published today (27 July 2020), HM Land Registry is now accepting dispositionary deeds (such as transferring , creating leases and securing mortgages) that have been signed with a witnessed electronic signature. We have updated practice guide 8: execution of deeds with details of the steps and measures our customers will need to take when using electronic signatures.
We fast-tracked our work on electronic signatures because of the help it would give our customers facing the challenges of working away from their offices in recent months. However, the benefits of using electronic signatures go well beyond meeting the immediate problems for conveyancers working from home. Removing the need for paper deeds and post from the conveyancing transaction speeds up the process and is a vital component of the increasingly online process of buying property.
By updating this guidance, we hope that conveyancers will be confident of our expectations and standards and also that the providers of electronic signature solutions will be able to develop more options for conveyancers to use.
This guidance was developed in discussion with the market, having taken our thoughts to our industry forum - a representative collection of regulatory bodies as well as conveyancers and lenders. We also shared our initial draft guidance via a blog which explored our current plans regarding electronic signatures, where we requested feedback on this draft.
We received a lot of feedback – including 61 comments from the blog and a number raised directly through the industry forum.
A lot of these comments welcomed the change, acknowledging it is a positive step for the sector. We also had confirmation from several electronic signature solution providers that they can meet the proposed practice and are encouraged to see HM Land Registry move in this direction.
As a result, we made several important changes to our drafted guidance.
Providing witness details
We amended step 1 of the signing and dating process to make it clear that witness details can be added by a conveyancer or the signer. This was raised by a number of respondents. This also allows for details of a witness to be added later in the process.
We amended step 5 of the signing and dating process because a number of people were unclear about what the word “contemporaneous” means in practice. The legal formalities required to validly execute a deed are unchanged and the amended guidance reflects this.
Retaining completion certificates / audit reports
We amended the guidance to make it clear that signatories’ conveyancers should retain a copy of the completion certificate or audit report produced by the electronic signature platform with their conveyancing file.
A few responses also questioned whether we should require the production of the completion certificate or audit report with the application and while we have not made this change at this stage, we will keep this under review.
Addressing additional concerns
There were a number of further concerns which were raised but we did not feel able to adjust our planned practice. But we did want to address some of the more common concerns.
Availability of options currently on the market
Our first concern has to be the security and integrity of the process. When we researched the market in electronic signature providers, it was apparent that none quite fitted what we thought would likely be the requirements. So we recognised early on that some development would be needed by the providers. We have been actively engaging with them for that reason throughout. We hope that in publishing the final practice guidance today, electronic signature providers will be able to quickly adapt their existing offerings to meet our requirements. Indeed, we have heard exactly this from a number of providers.
A number of respondents did not agree with our two-factor authentication requirement for witnesses.
We consider that two-factor authentication for witnesses as well as signers is appropriate to assure HM Land Registry that two unique individuals have signed. We will, however, be open to future changes around the appropriate methods of authentication we should accept. For example, it may be acceptable for a telephone call to be made instead of sending a text message to the signer and witness.
It was suggested that we amend the certificate which we have asked a conveyancer to provide, so that it can be given on behalf of the law firm rather than by an individual conveyancer. However, we believe it appropriate for a conveyancer to provide assurance that the signing process has been followed to the best of their own knowledge and belief. The conveyancer lodging the application should provide the certificate.
When any future changes are made to the guidance we will say when they are to take effect so that conveyancers are able provide the required certificate.
Our next steps
We are already holding further discussions with the sector to explore the potential introduction of qualified electronic signatures as soon as practically possible. Qualified electronic signatures are a form of digital signature that verify the signatory’s identity before they sign. They have the potential to be more secure than all current means of completing a transaction and they conveniently remove the need for a witness. If they do develop to be a successful option for completing property transactions, we will review the continued use of witnessed electronic signatures and may withdraw their acceptance, which would leave only the more secure qualified electronic signatures in use.
I would like to again thank everyone who was involved in the consultation process and we will continue to work closely with conveyancers and technology solutions providers to ensure that we make it possible to use this new technology in a secure and sensible manner.