Technology is increasingly becoming part of our lives. There is not much that cannot now be done on a smart phone or tablet, so it’s no shock that solicitors are being asked whether documents can be completed electronically. This would mean that the signature, used to validate the documents, would also be sent electronically. However, does an electronically signed property document meet the criteria needed?
Electronic signatures
An electronic signature can vary:
- When a signature is hand written on a document and is then scanned into a digital format.
- When someone signs a digital screen using a special pen to create an electronic version of a signature. This typically is the format used by delivery people.
- Clicking a button, for example to say you accept the terms and conditions or a PIN number at an ATM are also seen as forms of a electric signature.
A valid document
The legitimate completion of a document will depend on the nature of the document and the legal personality of the person executing it. For most documents to be valid, they need to be in writing, signed on behalf of each party and all the terms that have been agreed need to be expressed. If all of these requirements are not covered, the contract is invalid. Property transactions usually consist of either a contract or a deed, both of which hold different policies in relation to electronic signatures.
New laws
There are couple of relatively new laws on the use of electric signatures in contracts, for example The Electronic Communication Act 2000. This act states that contracts can be finalised through electronic means so a person can legitimately sign a document without using ‘wet ink’.
However, changes to the law are only applicable to the use of electronic signatures in contracts, not deeds. Currently, it is uncertain whether they can be used to finalise a deed.
The Land Registry does not accept electronic signatures for the registration. So when managing a deed it is best to assume that a ‘wet’ signature, by both parties, is always needed.
The future?
There is likely to be an increase in the uptake of electronic signatures used in property transactions due to both the time and cost advantages for the people involved. People wishing to use electronic signatures for documents, excluding Land Registry, could make an additional document stating that an electronic signature is a valid interpretation of a written signature; although, this clause may not be adequate to all cases at court.
For the time being, until new laws are enforced on the use of electronic signatures, it is wise to assume that property transactions are best to be signed using a ‘wet’ signature.