Real Estate Tip of the Month - Execution of Documents - Cross Border Considerations

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Real Estate Tip of the Month - Execution of Documents - Cross Border Considerations

Published 23 noviembre 2022

There are differences between Scottish and English legal systems. It pays to bear this in mind when procuring legal services for property deals north of the border.

A good example of this is around creation, execution (and enforceability) of property documents.

Documents evidencing a property deal in England and Wales must comply with various bits of law e.g. The Law of Property (Miscellaneous Provisions) Act 1989, The Land Registration Rules 2003 or The Law of Property Act 1925. 

In Scotland, although a written agreement is also a prerequisite for a broad range of property transactions that involve a real right in land, execution is governed by The Requirements of Writing (Scotland) Act 1995. Non-compliance can result in a penalty being incurred and the document being rejected by the Keeper of the Land Register of Scotland.

Jurisdictional differences around execution have also been brought into focus recently because of the traction electronic signatures have gained in the property sector following the difficulties in completing deals during lockdown.

There are, confusingly, a variety of types of electronic signatures. They are not all the same and different jurisdictions have different approaches. Additionally, electronic signature providers offer different capabilities.

In England and Wales HM Land Registry allows the use of “conveyancer certified electronic signatures” in property deals. This is, broadly, a standard electronic signature to which two factor authentication is applied as a way of ensuring the identity of a signatory.

The same position is true in Scotland in certain situations. However, the Law Society of Scotland has confirmed here that standard electronic signatures are not suitable for missives (being a series of formal letters between parties forming a binding contract) and other documents dealing with the transfer of rights in land or where, for example, a document requires to be registered or must have self-proving status. “Self-proving status” means the document contains evidence proving its own validity – such as when a deed has been executed by a signatory before a witness, and the witness also signs it to confirm they witnessed the signatory signing. Because signing was witnessed, and recorded in the deed, it is self-proving.

The Law Society of Scotland clarifies that the forms of electronic execution available for property deals are advanced electronic signatures (which includes additional user authentication steps where a signer will be asked to produce and use a valid document to confirm their identity, as well as a unique access code after the signing process) or qualified electronic signatures (which involves a face-to-face ID verification process by a Qualified Trust Service Provider and the resulting digital certificate created with an electronic signature device).

Since September 2022 the Register of Deeds (often known as the Books of Council and Session) will accept electronic documents signed by a qualified electronic signature (QES) (subject to limited exceptions, such as Deeds requiring joint recording in the Land Register or Register of Sasines, as these registers are not yet open to electronic documents) through digital submission. There is an online form for e-submission and practitioners can upload electronic documents signed with QES only.

Also from September 2022, it is possible to submit mixed format deeds. If you have a single application that comprises a collection of both wet signed documents and QES signed documents (such as missives or counterpart documents, permitted to be signed by QES), you may present the QES signed soft copy document first via the online system, and then print a confirmation page to submit by post with the wet signed document.

Whether an electronic signature platform can accommodate jurisdictional differences or is appropriate requires careful consideration and deed specific advice, before committing to a method of execution.

Authors

Iain Witheyman

Iain Witheyman

Glasgow

+44(0)141 223 7843

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