Social distancing puts paid to the logistical norms that are inherently part and parcel of the conveyancing transaction.
Another critical issue during lockdown is signing the necessary legal documents in accordance with strict legal requirements, so it’s a welcome move that HM Land Registry has at last announced it will accept so-called Mercury signings, at least, temporarily. It will also make it easier to verify a person’s identity for land registration purposes.
Grinding to a halt
Speaking in the first week of May, one conveyancing sole practitioner commented that other than a few completions for empty properties, she then had no completions which will be possible until the restrictions on movement are lifted - all are transactions which are in chains. Most residential conveyancers will be in a similar position.
The problem is, there is little work coming in because estate agents cannot market properties and potential buyers are not going to want to enter properties for viewings with the ongoing social distancing requirements which are, undoubtedly, going to be a fact of life for the foreseeable future.
For transactions that are still progressing, the signing of documents has remained a sticking point so Land Registry’s announcement is a major step forward.
It has stated it will temporarily accept the ‘Mercury’ signing approach in relation deeds from Monday 4 May with the aim of “reducing problems with post, paper and scanning”.
The Mercury approach
So what does signing deeds using Mercury signings mean in practice? For land registration purposes, the signature page of the deed must be signed in pen and witnessed in person - the witnessing must not be done by way of video call or conference.
The signature will then need to be captured, with a scanner or a camera, to produce a PDF, JPEG or other suitable copy of the signed signature page. Each party will then send an email to their conveyancer to which is attached the final agreed copy of the document and the copy of the signed signature page.
Land Registry has updates Practice guide 8: execution of deeds to reflect these temporary changes.
The Law Society also has a practice note on virtual signingswhich practitioners will find useful.
A further important (but also temporary) change has been announced. Land Registry has relaxed its requirements to make it easier for solicitors to verify identity for the purposes of land transactions. For now, the range of non-conveyancer people who can undertake verification has been widened to include those who work, or have worked, in certain professions including:
- retired conveyancers, chartered legal executives, solicitors and barristers
- bank officials and regulated financial advisers
- medical doctors, dentists and veterinary surgeons
- chartered and certified accountants
- police officers and officers in the UK armed forces
- teachers and college and university teaching staff
- Members of Parliament and Welsh Assembly members
- UK civil servants of senior executive officer (SEO) grade or above
Note that if a member/past member of one of these additional professions is undertaking verification, they and the individual being verified must each hold a full UK passport and provide a copy of the biometric page of it. They must also have known each other for at least one year but must not be related.
Verification can now be done by way of a video call such as Zoom, Skype or FaceTime and, importantly, no one particular service, provider or device is being prescribed by Land Registry However, care must be taken to use one that is secure to mitigate the cyber risk.
If verification is done via video call, both the verifier and the verified must provide a screenshot photograph (in colour) of both of them taken during the call while verification is taking place. Land Registry is clear here: both people must be looking at the camera and each face must be sufficiently clear to enable a comparison with the photograph on the copy of the personal details page of the passports
This photo must be sent with the ID1 or ID2 form. ID1 or ID2 forms must typically be no more than three months old but Land Registry will now accept those that are up to six months old.
Three new ID forms have been introduced for completion where a non-conveyancer is verifying someone’s identity (one for an individual and one for a company) and a separate form for where it is being done via video.
A new practice guide has been published in light of the changes.
Land Registry has also confirmed it will not reject an application where evidence of identity is missing. It will send a requisition instead.
The nature and use of digital signatures has been under consideration for some time. It is widely known that the Law Commission confirmed last Autumn that electronic signatures are as valid as traditional handwritten signatures when executing documents where a signature is required by statute, so long as there is a demonstrable intention to give legal authorisation by way of that signature. But this was with the exception of transfers and dispositions of land and property under the Land Registration Act 2002.
So practitioners may be wondering whether these temporary restrictions could be the precursor, perhaps seen as a sort of pilot, to a more permanent acceptance of digital signatures in the conveyancing process.
Land Registry has made it clear these changes could be modified or even withdrawn with short notice if they are considered to increase the risk of fraud to the register.
For this reason, practitioners are urged to utilise the Mercury approach with particular caution if they want to see a more permanent change. However, introducing Mercury signings as a long-term alternative would be a radical step and one which would require a thorough consultation process before further moves are made in that direction.