History Made As E-Signatures Used In a Property Transaction For The First Time

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History Made As E-Signatures Used In a Property Transaction For The First Time

Traditionally transactions involving property have been carried out by way of wet signatures provided in the presence of an independent witness. Many people had thought that the likelihood of change taking place in this practice to be unlikely any time soon. However, on 1 June 2022, news emerged of a potentially revolutionary development in the law of England and Wales which could have widespread implications.

One of the leading law firms in England and Wales announced that it had carried out a property transaction, registered it through the Land Registry via the use of an electronic signature, and seemingly against the traditional position without requiring the oversight of witnesses.

How Was The Transaction Carried Out?

The firm carried out the property transaction through a Qualified electronic signature which was then authenticated through an electronic identity check.

What Are Qualified Electronic Signatures?

A Qualified Electronic Signature is a variety of e-signature designed around the concept of Public Key Infrastructure. This is the framework that safeguards communications between the client and the internet website.Several features distinguish Qualified Electronic Signatures and the transaction from other signatures was the publication of a certificate processed in a digital format.

Who Can Issue Qualified Electronic Signatures?

From closely reading the details of this transaction it is clear that the use of Qualified Electronic Signatures is only permitted on the condition that such certificates are exclusively published by a specifically approved provider. They can also only be utilized on the basis that the identification of the signatory is corroborated during an internet-based or in-person appointment.

Using E-Signatures in the Transaction Must Have Been Time Consuming, Right?

It may sound complicated, and there may be a perception that it would be time-consuming. However, this is far from accurate. The entire process took just over one day. To put the process into context, under normal circumstances, it is not uncommon for similar property registration processes to take one and a half to two months, so to have the whole process completed in just over one day is extraordinary.

What Has Brought About This Change?

This change from wet signatures requiring a witness to electronic signatures not needing to be witnessed has not been introduced overnight or on a whim as many lay persons perceive. There had also been deep-seated concerns that electronic signatures were not as secure as wet signatures which were independently witnessed in person. However, the changes have been introduced following a lengthy consultation process by a working group and it was found contrary to the popular perception that such signatures were just as secure as written witnessed signatures. The group also claimed that in most cases where electronic signatures were used they are legally binding. The firm carrying out the transaction commented on how exciting it was to play a role in this historically important transaction. The transaction allowed the firm to view the process from the client's perspective and to see how worked it worked in real-time in a live transaction for the first time.

What Impact Has This Had On The Legal Industry?

Richard Jones from Hugh James Solicitors commented that this could be a potentially major leap towards self-authentication of transactions involving deeds. Mr. Jones foresees that this development could have a significant effect and could lead to e-signatures being used to sign mortgage deeds, business contracts, and property transactions. Doug Luftman from Docusign believes that this is a major step forward in the Land Registry's process of adopting e-signatures and has the potential to hugely benefit the legal profession.

The Legists Content Team

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THE ARTICLE WAS WRITTEN USING THE FOLLOWING SOURCES

[1] Cross, Michael – First electronically signed property deal goes through – 1 June 2022 – Law Society Gazette - First electronically signed property deal goes through | News | Law Gazette

[2] Cross, Michael – E-signatures can provide 'witness level' security, working group concludes – Law Society Gazette – 2 February 2022 - E-signatures can provide 'witness-level' security, working group concludes | News | Law Gazette

[3] Cross, Michael – Electronic signatures legally valid, Law Commission confirms - Law Society Gazette – 4 September 2022 - Electronic signatures legally valid, Law Commission confirms | News | Law Gazette

[4] Law Commission – Electronic execution of documents - Electronic execution of documents | Law Commission

[5] Section 2 – Law of Property (Miscellaneous Provisions) Act 1989

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