Housebuilder Top Tip: Electronic Signatures - The Future is Now?

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Housebuilder Top Tip: Electronic Signatures - The Future is Now?

Published 26 February 2019

A familiar headache for housebuilders is a delayed exchange owing to the unavailability of signatories.  Could the real estate industry be close to unlocking this by moving to electronic signatures? Our view is that until there is further clarification, guidance and legislative reform, the traditional “wet signature” will continue to be required.

The main hurdle for technology to clear is a substantive one given that the law requires that for a deed to be validly executed, the signature needs to be witnessed and an attestation clause recorded on the document.

Last year the Law Commission concluded that under the current law, land contracts and deeds can be validly executed with an electronic signature. However it further concluded that the physical presence of a witness is still required which somewhat undermines the advantage of electronic signatures.

The Land Registry’s policy is to move towards digital conveyancing and as of April 2018 it will accept a document with a certified digital signature (although this involves a stringent verification of the signatory’s identity to prevent fraud). The service has not yet been set up for use by corporate bodies but is forecast to be available if the service generates credibility within the real estate industry.

The progressive move from HM Land Registry and the Law Commission’s consultation paper does however demonstrate that there is the intention to modernise real estate transactions.

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