Our Property Insights Hub brings together all of our materials to help you in the current uncertain environment.
As the property industry feels the full impact of lockdown, we have been advising clients on how to get deals done where it is no longer possible for paper documents to be circulated and signed. The Law Commission has confirmed that the majority of documents can be validly executed using electronic signatures. E-signing platforms are getting a lot of attention but from a legal point of view, there is no need for a complex system to create an electronic signature. A simple name typed into the document can be adequate, as long as any other legal formalities are satisfied. This is where it gets more tricky.
For deeds, a signature may need to be witnessed by someone in the same room and as we highlighted last week, that is creating real problems. By far the biggest obstacle to the property industry moving entirely to digital signing is that the Land Registry still needs “wet ink” signatures on documents like leases and transfers. The Land Registry is dealing with a huge change to its working practices, as registrations and searches have to be processed “remotely” for the first time. This means that although it is sympathetic to the problems we are all having with wet ink signatures, it is simply not possible for the Land Registry to change its requirements overnight. In practice though, many of the documents currently being processed are side letters, temporarily altering the way payments may be made and deals may be completed. In these situations, there is usually a creative way round the signing problems, especially with commercial and proactive lawyers on both sides.
When the current crisis is over, we will probably look back at these weeks and months as a tipping point, when digital documents became the norm, not the exception.
As always, please contact us if you would like any further advice.