19 October, 2020 - 12:32 By News Desk

Execution of deals in the COVID era

For the most part, a legal interest in land can only be transferred or created by deed. A deed must be in writing, and to be validly executed by an individual, they must sign in the presence of a witness. 

The witness must be physically present when the deed is signed. Only then and once completed can it be registered with HM Land Registry (HMLR), writes Jacqueline Jones, Solicitor with Birketts LLP.

The current climate

As 2020 has progressed we have seen two main problems with the valid execution of deeds: the ability to put a traditional manuscript (‘wet’) signature on a deed; and the availability of appropriate witnesses.

The emergence of COVID-19 – and consequent ‘lockdowns’ – has impacted on people’s ability to attend their usual workplace, have access to printing or scanning facilities and even the ability to be in proximity to others so that the requirement for a physically present witness can be met.

Witnesses

Even in these times it remains a requirement for a witness to be physically present during the signing of a deed. While the law does not prevent a spouse, civil partner or co-habitee from being a witness (so long as they are not also a party to the deed) it is best avoided. 

But that is easier said than done where an individual’s ability to see anyone, other than the immediate family with whom they live, is restricted. It is acceptable for a signatory and witness to have some physical distance between them (they can be separated by a window), so long as the signatory can clearly be seen signing the deed.

While the logistics of organising a witness in a way so as to satisfy safety needs (and whatever law/rules/guidance around social distancing may be imposed by government at the time) are achievable, the more difficult aspect of the process must be the conveyancer’s ability to obtain a validly executed deed so as to satisfy HMLR’s registration requirements.

Electronic signatures

HMLR have recently changed their practice guidance to allow certain deeds (such as transfers) to be signed electronically. By ‘electronic’ signature we mean one that is applied via recognised electronic signature software. 
HMLR requires that all parties must agree to the use of electronic signatures, and the platform to be used. Save in limited circumstances all parties must have a conveyancer acting for them. 

A conveyancer must be responsible for setting up and controlling the signing process. The conveyancer with such responsibility must (1) upload the final agreed version of the deed on to the agreed platform; (2) insert the name, email address and mobile phone number of the signatories and witnesses; and (3) highlight the fields that need completing within the deed and indicate by whom they are to be completed and in what order.

The platform then emails the signatories to let them know the deed is ready to sign. The signatories will use a password sent to them by text message to gain access to the deed where they must then sign (electronically) in the presence of a witness. 

The witness will receive an email asking them to sign in (using a password sent by text by the platform) and add their details. The controlling conveyancer then dates the deed within the platform and submits their application for registration to HMLR with a prescribed certification.

The difficulty is that many conveyancers do not subscribe to an appropriate platform, or do not subscribe to the extent that they may use the platform in the manner strictly prescribed by HMLR. What is the alternative?

Scanned manuscript signatures

HMLR will, for the purposes of a registration of a transfer and certain other deeds, currently accept a scanned manuscript signature being added to the final version of the deed. The process for obtaining a validly executed deed by this method will look something like this.

  • Final copies of the transfer will be emailed to each party by their conveyancer
  • Each party prints the signature page and signs in the physical presence of a witness
  • The witness signs the signature page; and
  • Each party sends a single email to their conveyancer attaching the final agreed copy of the transfer and a PDF/JPEG of the signed signature page.

The conveyancer may then complete the transaction and apply to register it by sending to HMLR the appropriate application form, the final agreed transfer and the signed signature page.

While this is currently likely to be the preferred method for execution of deeds it does presuppose that the signatory has access to email and a printer/scanner. 

Quite often there is an element of urgency in getting deeds executed - once they are in agreed and final form - so as not to jeopardise a transaction or agreed completion dates.

Our recommendation is, in any event, that matters are discussed early on so that for each transaction the conveyancers and their clients know sooner rather than later what hurdles there might be to obtaining witnessed signatures and so that those issues can be addressed before they become a potentially insurmountable last minute problem.

• You can call Jacqueline Jones on 01473 921739 or email her at: jacqueline-jones [at] birketts.co.uk

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