Since the start of lockdown, one of our most frequent questions from customers has been about whether electronic signatures could be accepted (on documents such as a deed transferring property), instead of having it signed with a pen.
This is called a "wet-ink signature". It can be difficult to print, post, or scan at a time when many of us work from home.
We will accept witnessed electronic signatures soon and take steps to make sure that digital signatures, more specifically Qualified Electronic Signatures, can be used in collaboration with HM Land Registry.
What does it mean to have a signature that is electronic and digital?
Two types of electronic signatures are generally accepted. The first, which I will refer to as an 'electronic sign', is simply a replacement for a wet one. A deed must be signed by the person "doing it" and can also be electronically signed by a witness.
The second type I'll call a "digital signature" and it is legally a completely different thing, with its own requirements. Digital signatures are more secure as they have a process that precedes them, which positively identifies the signatory. The resultant document is encrypted to ensure that it cannot be altered. This allows for a digital signature that is not accompanied by a witness.
Since 2002, digital signatures for land transactions are legal. There are two types of digital signatures: Qualified Electronic Signatures (Advanced Electronic Signatures) and Qualified Electronic Signatures (Qualified Electronic Signatures). The difference between Advanced and Qualified is a bit confusing. Qualified only means that service providers must be qualified. They are regulated by the Information Commissioner's Office in the UK. Due to their added security, they are both more appealing than simpler electronic signatures.
Once, Qualified Electronic Signatures could be a little difficult to use. They were also not practical for one-off uses such as in a transaction. The user experience with Advanced Electronic Signatures is almost identical thanks to technological advances. The standards that 'qualified trust services providers' must meet to be qualified providers of Qualified Electronic Signatures are what underpin the confidence we all have in them, even if they may not conform to the stricter definition of an Advanced Electronic Signature.
We as Land Register keepers need to ensure that a document has been signed in a manner that gives it legal effect.
We brought together representatives from regulators and trade bodies, conveyancers, lenders, estate agents, and lenders to discuss the immediate problems of working during the lockdown in the early stages. We wanted to discuss how our solutions to current problems can benefit conveyancing in the future. The group helped us tremendously with the planning stages. We discussed how and when to approach electronic and digital signings. We also did extensive research on the market for electronic and digital signatures. We believe we can accept witnessed electronic signatures as well as Qualified electronic signatures with certain safeguards.
We have today issued draft practice guidance setting out the basis on which we would accept electronic signatures. Any comments or suggestions you may have before 18 July are welcome. [Update: The feedback form has now been closed. We are grateful to all who gave feedback.
Many businesses currently providing electronic signatures to other industries should be able to meet these criteria quickly, we believe. On top of the other practice changes we have already introduced, conveyancers with immediate help meet the difficulties of working with paper in the current crisis.
This isn't just about the present.
The most digitally advanced sectors are those that have prospered over the past few months. Conveyancing, however, is not one of these. There are some digital elements to it, but they must be combined. It would be an important component of a digitally-enabled conveyancing process to have a sustainable, long-term, and secure way of signing property transactions.
We believe that Qualified Electronic Signatures are the best long-term part of that digital future. They provide additional security, and the digital nature will allow for automated and joined-up processing of other transactions.
We will soon issue our practice note on Qualified Electronic Signatures.
We expect Qualified Electronic Signatures to become more common and service providers will tailor their use for conveyancing. We will examine the use of electronic signatures to determine if they are a viable option for property transactions. If so, we may withhold their acceptance.
The question of how to securely identify individuals digitally and securely is closely linked to electronic signatures. We have had a fantastic response to my last blog on that subject and look forward to supporting the industry as it develops a means of using cryptographic biometrics as another foundation of efficient, digital, and secure means of conveying property. We will host a series of virtual events to discuss the best way to work with service providers and conveyancers at the end of the month. Once these have occurred, we will keep you updated.
Thank you to the HM Land Registry Industry Forum, which includes conveyancers from all walks of the industry, for supporting us in our evaluation of electronic signatures and general search for a silver lining amid the storms.