Electronic signatures may be used, and take legal effect, in any documents which don’t need to be registered with the Land Registry or HMRC.
So this includes documents such as sale and purchase agreements; agreements for lease; options and pre-emption agreements; leases for a term up to 7 years (where easements are not being registered); ASTs and tenancies at will; licences to occupy and other licences; rent deposit deeds; side letters; guarantees; wayleave agreements; and rent review memos.
Electronic signatures cannot normally be used on deeds that have to be registered at the Land Registry, for example transfers; leases of more than 7 years; mortgages or charges and their discharge; and deeds of easement.
The Land Registry also has strict requirements on confirming identity.
To make things a little easier during the coronavirus pandemic the Land Registry has published temporary changes to its requirements for identity verification and execution of deeds, which follow recommendations recently made by the Law Commission.
The changes are set out in Practice Guide 67A: Temporary changes to HM Land Registry’s evidence of identity requirements, three new ID Forms (ID3, ID4 and ID5) and updates to Practice Guide 8: Execution of Deeds and Practice Guide 67: Evidence of identity; conveyancers.
The main changes are:
· Rejection of applications – the Land Registry will not reject applications where evidence or confirmation of identity is missing, or incomplete, but will raise a requisition instead, although applications may still be cancelled where the applicant fails to comply with the requisition.
· Verification by conveyancer – conveyancers must continue to complete application forms and provide evidence or confirmation of identity where possible, but the Land Registry will now accept Forms ID1 and ID2 completed up to 6 months before the date the application is made (it is usually only 3 months). Conveyancers may also verify someone’s identity by video call if they comply with certain conditions, which include completing and lodging a Form ID5 and keeping a screenshot photo of the person.
· Verification by non-conveyancer – the Land Registry will now accept applications from non-conveyancers where the applicant’s identity has been verified by another non-conveyancer (who is working in, or has retired from, one of the recognised professions and is not related to the person being verified). They must complete either Form ID3 (for individuals) or Form ID4 (for corporate bodies), and those forms must not be more than 3 months old when the application is made.). Non-conveyancers may also verify someone’s identity by video call if they comply with certain conditions.
· Witness signatures – where the law requires a deed to be signed “in the presence of a witness”, the Land Registry will continue to require a witness to be physically present at the moment of signing. A person can effectively witness a signature through a glass panel or window, if they can clearly see the signature being made.
· Electronic execution of deeds - The Land Registry will accept, until further notice, transfers or other dispositionary deeds that have been signed in the following way. A signature page must be signed in pen and witnessed in person. The signature page is then copied, with a scanner or camera, to produce a PDF, JPEG or other suitable copy. Each party then sends a single email to their conveyancer, attaching the final agreed copy of the document and the copy of the signed signature page. Practice Guide 8 has more details on this method.
There may be other issues however that prevent the use of electronic signatures. For example, if a company’s constitution prevents it from doing so, or where a company executes documents by affixing a common seal. The relevant company documents will need to be changed first to allow the use of electronic signatures.
The importance of identity checks was a key consideration in the high profile 2018 cases of Dreamvar v Mischon de Reya and P&P Property Limited v Owen White & Carlin LLP. Anyone dealing with transfers of property must be mindful of the continuing need to be vigilant and alert to the dangers of property fraud.
This temporary relaxation of the rules by the Land Registry may be changed or withdrawn altogether at short notice.