When the UK went into lockdown for the first time in March 2020, it caused a great deal of disruption in the legal sector – particularly within conveyancing.
With property transactions suddenly taking place remotely, many buyers were struggling to access equipment such as printers, scanners and postal services, which were required for signing and returning documents to their conveyancer. As a result, HM Land Registry (HMLR) announced in July that it would accept “witnessed electronic signatures” on certain documents instead of the traditional ‘wet-ink’ signature:
“Until further notice, we will accept for registration transfers and certain other deeds […] that have been electronically signed provided that the requirements […] are satisfied.”
In a press release, the government stated that the new rules would make it “simpler and faster” for people to move home. This is different to the “Mercury Signing Approach” which the Land Registry introduced in May 2020 as a temporary measure.
How will it work?
Conveyancers will now be able to upload deeds onto an online platform and send the link via email to the signatory. The signatory will then be able to digitally sign the deed in the physical presence of a witness, who will be prompted to sign the document in turn and add their address in the space provided. The document will then be returned to the conveyancer, who will lodge the application electronically.
HMLR is also exploring the possibility of introducing ‘qualified electronic signatures’, which use technology to verify the signatory’s identity prior to signing the document. This would remove the need for a witness and render the process quicker and more convenient.
A step in the right direction
In a blog, HMLR stated that feedback from conveyancing professionals regarding its acceptance of e-signatures had been very positive, with many acknowledging it represented a positive step forward for the sector.
Simon Hayes, Chief Executive and Land Registrar, commented:
“What we have done today is remove the last strict requirement to print and sign a paper document in a home buying or other property transaction. This should help right now while lots of us are working at home, but it is also a keystone of a truly digital, secure and more efficient conveyancing process that we believe is well within reach.”
However, the change hasn’t been enough to tackle some of the more pressing difficulties currently affecting the conveyancing sector. The Stamp Duty Holiday, introduced in July in a bid to get the property market moving following the first lockdown, has led to an unprecedented surge in demand as buyers flock to get their transaction completed before the 31 March 2021 deadline.
While the Stamp Duty Holiday has certainly done its job in kickstarting the market post-lockdown, , the sheer volume of transactions is simply outstripping the sector’s capacity to deal with them – the acceptance of e-signatures has not changed this in any significant way. So, in this respect, the government’s measure to support property transactions has actually considerably slowed them down.
What does the future hold?
The growing acceptance of technology within the conveyancing process could lead to further positive changes in the future, according to the Council for Licensed Conveyancers (CLC). Currently, the conveyancing process places the onus on buyers to properly investigate the property they are purchasing according to the principle of caveat emptor, or ‘buyer beware’.
This slows down the process, as the buyer’s solicitor is obliged to wade through all the information available about the property and raise enquiries with the seller’s solicitor before proceeding to exchange and completion. If the buyer purchases the property and later discovers issues or problems, the law will not step in to help them except under a specific set of circumstances.
Now, the CLC is proposing a move to so-called ‘vendor disclosure’. This would make it the seller’s responsibility to provide all the information required, with failure to do so allowing the buyer to withdraw from the transaction without penalty. If this is adopted, it will represent another significant step forward in streamlining the conveyancing process.
A drive towards technology
Despite the current capacity and resource issues facing the conveyancing sector as a result of the Stamp Duty taxholiday, the winds of change are clearly blowing in the right direction. With lockdown forcing the rapid take-up of technology within the sector, the digitisation of conveyancing is on the verge of becoming a reality.