Execution of documents during Covid-19. What’s the latest?
Posted on 6th August 2020
Under common law, a wet signature is usually required to authenticate intention, although that requirement can be dispensed with by consent, and such consent can be implicit. This means that an electronic signature can replace the need for a wet signature in certain circumstances.
In a recent blog we outlined some of the issues presented by COVID-19 in the execution of documents such as Wills and Deeds.
We have now had recent changes by the land registry and proposed by the government to tackle the challenges posed.
Land registry changes for deeds
On 27 July 2020, the land registry announced (until further notice) a temporary relaxation of its rules on accepting for registration electronically executed deeds.
Details are contained in their Practice Guide 8.
Deeds that can be signed electronically include:
- A deed that effects one of the dispositions referred to in section 27(2) and (3) of the Land Registration Act 2002 (e.g. leases, mortgages, transfers)
- A discharge or release in form DS1/form DS3
- Equivalent deeds in respect of unregistered land
- An assent of registered/unregistered land
- A power of attorney (other than a lasting power of attorney)
The requirements for electronically executed documents are:
1) All the parties agree to the use of electronic signatures and a platform in relation to the deed.
2) All the parties have conveyancers acting for them.
3) A conveyancer is responsible for setting up and controlling the signing process through the platform.
4) A prescribed signing and dating process is followed
a) STEP 1 – The conveyancer controlling the signing process:
- uploads the final agreed copy of the deed (including any plans) to the platform
- populates the platform with the name, email address and mobile phone number of the signatories and the witnesses.
- highlights the fields that need completing within the deed and indicates by whom they are to be completed, setting out the order (so the witness is after the signatory whose signing they are witnessing).
b) STEP 2 – The platform emails the signatories to let them know the deed is ready to sign.
c) STEP 3 – To access the deed on the platform via the email they have received, the signatories are required to input an OTP sent to them by text message by the platform. The OTP must contain a minimum of six numbers.
d) STEP 4 – The signatories enter the OTP and sign the deed in the physical presence of the witness, with the date and time being automatically recorded within the platform’s audit trail.
e) STEP 5 – Having observed the signatory sign the deed, the witness will receive an email from the platform inviting them to sign and add their details in the space provided in the attestation clause. The witness inputs an OTP sent to them by text message by the platform, signs and adds their address in the space provided, with the date and time being automatically recorded again.
f) STEP 6 – Once the signing process has been concluded, a conveyancer effects completion of the deed by dating it within the platform.
5) The conveyancer who lodges the application does so by electronic means and includes with the application a PDF of the completed deed.
6) The conveyancer lodging the application provides the following certificate: “I certify that, to the best of my knowledge and belief, the requirements set out in practice guide 8 for the execution of deeds using electronic signatures have been satisfied.”
The deed may be signed by an individual or individuals on their own behalf or on behalf of another person, including a company. Where the deed is being signed on behalf of a company by two “authorised signatories” under section 44(2)(a) of the Companies Act 2006, no witness will be involved, and the requirements are to be read accordingly.
The Land Registry has also advised that conveyancers drafting a deed that might be electronically signed may wish to add a statement to the following effect next to or beneath where the witness is to sign: “I confirm that I was physically present when [name of signatory] signed this deed.”
It is important for conveyancers to retain with their conveyancing file a copy of the completion certificate or audit report produced by the electronic signature platform at the end of the signing process.
If it is necessary for one party to a deed to sign in wet ink and another to sign with an electronic signature, this can be done by way of counterpart deeds. It is also open to parties to sign counterpart deeds each using a different electronic signature platform provided that, in each case, the requirements set out by the Land Registry are adhered to.
Clearly the above is not suited for unrepresented parties and all parties (including witnesses) will need to provide both an e-mail address as well as a mobile phone number given the need for two-factor authentication to ensure security. Some platforms may not yet be compatible with the requirements imposed by the Land Registry including this function, albeit the Land Registry does not currently dictate which platform must be used.
Statutory changes for wills
On 25 July 2020, the government issued a press release confirming that they will be making changes to legalise the remote witnessing of wills.
New legalisation will be brought in September to effect these changes with retrospective effect from 31 January 2020. The change will remain in place until 31 January 2022, or as long as deemed necessary.
They stressed however that “the use of video technology should remain a last resort, and people must continue to arrange physical witnessing of wills where it is safe to do so.”
The statutory instrument will amend the Wills Act 1837 to stipulate that where wills must be signed in the ‘presence’ of at least two witnesses, their presence can be either physical or virtual.
The technology used must also be fit for purpose – you must be able to see and hear what is happening at the time.
Wills will still need to be signed by two (adult) witnesses who are not the beneficiaries. They have not gone as far as confirming that electronic signatures are permitted (unlike for deeds as set out above).
The government has also issued guidance on the making of wills using video-conferencing.
Obviously there remain concerns about fraud, duress and undue influence; we fear that there will be increased litigation as a result of Wills executed and witnessed during the pandemic.
The law is moving at rapid pace to meet the challenges posed by COVID-19 in an unprecedented manner, changes have been long awaited in some areas. This may not be the end of the changes and more could be in the line. The pandemic is changing the way we all work, think and live.
Whilst moving with the times is welcomed, caution must be exercised for these measures which may not have had the luxury of time to properly consider, review and consult on; adequate safeguards must in place to prevent abuse of the processes.