Post-completion: Mercury signatures and conveyancer-certified electronic signatures

In this week’s look at post-completion, Priscilla Sinder and Maria Hardy from the PCC Education Hub examine the requirements for virtual signatures. If you have any questions related to post-completion you’d like Priscilla and Maria to answer, email press@todaysconveyancer.co.uk.

 

HM Land Registry published its 82^nd practice guide covering electronic signatures on 28 March 2022. The guide was released following the Law Commission’s report numbered 386, published on 4 September 2019, which endorsed the Law Society’s practice note in 2009 – ‘Execution of documents by virtual means’, which advocated such an approach as ‘prudent’ where all the parties were not physically present at the time of completion of a transaction.

The Law Commission agreed with the Law Society that the final versions of the PDF or word version of a document and the PDF signed signature page, when attached to the same email constituted an original signed document.

Mercury signatures

Such a means of signing was known as the Mercury signature following on from the ruling in R (Mercury Tax Group Ltd) v HMRC [2008] EWHC 2721 (Admin) where Underhill J set out section 1(3) of the Law of Property (Miscellaneous Provisions) Act 1989:

“that that language necessarily involves that the signature and attestation must form part of the same physical document”

Section 1(3) of the Law of Property (Miscellaneous Provisions) Act 1989 reads:

An instrument is validly executed as a deed by an individual if, and only if—

(a)      it is signed—

(i)  by him in the presence of a witness who attests the signature; or

(ii) at his direction and in his presence and the presence of two witnesses who each attest the signature; and

(b)     it is delivered as a deed

Mercury signing requires a traditional ‘wet ink’ and these requirements must be met:

Requirement 1

All parties to the transaction must be legally represented, even those who are not signing, however there are three exceptions to this:

a. A lender.
b. Personal representative in respect of an assent.
c. Donor in respect of a power of attorney; must be legally represented.

Requirement 2

These steps must be followed:

i.    Final versions of the documents are emailed by their conveyancer to the signing parties. (To avoid a requisition conveyancer’s may wish to add the following statement: “I confirm that I was physically present when [name of the party signing] signed this deed.”)

ii.   Each party prints the signature page only.

iii.  Each party signs the physical document in front of their witness.

iv.  The witness signs the signature page.

v.   Each party sends one email to their conveyancer with the final version of the document plus a PDF (or other suitable copy) of the signed page.

vi.  The transaction is complete.

vii. This document is then uploaded by the conveyancer to form part of the application. This can be performed electronically or printed out and physically combined. The conveyancer must certify this deed to be the true copy of the original.

In steps v and vii the conveyancer need not be the same instructed conveyancer to the transaction provided consent has been given by all the parties conveyancers.

Conveyancer-certified electronic signatures

The Law Commission recognised an electronic signature could have the same effect as a traditional wet ink signature but instead of the witness being physically present at the time of signing, the witness would see the signatory adding their signature electronically to a document.

The Law Commission identified that if HM Land Registry only accepted wet ink signatures this went against the idea of electronic signatures, it also appreciated that HM Land Registry was the authority for when it came down to means of execution for documents that were to be registered.

As a result, HM Land Registry’s practice is to approve electronic signatures that are encompassed by a conveyancer’s certificate.

It is imperative that an operating system or platform is used that will manage the signing process, including the creation of a signature. The PDF of the final document, which is finalised in the platform will be lodged with the application.

In order for an electronically signed deed to be accepted by HM Land Registry the following key requirements and steps must be met:

Requirement 1

The same as a Mercury signature.

Requirement 2

A conveyancer is responsible for setting up and controlling the signing process through the platform.

Requirement 3

The conveyancer controlling the signing process must perform these steps:

i.   Final versions of the documents are uploaded to the platform.

• • The platform is populated with the name, email address and mobile phone number of the signatories and the witness.
  • There are highlighted fields in the platform directing who is to complete them and in what order.

ii.   The platform emails the signatories giving them access to the electronic document.

iii.  The platform texts the signatories a one-time password (OTP).

iv.  The signatories enter the OTP and sign the deed in the physical presence of their chosen witness.

v.   The platform emails the witness giving them access to the platform and an OTP is issued, allowing them to input their name and details.

vi.  The conveyancer will date the electronic document within the platform; this date may be later due to completion taking place later.

vii. The conveyancer produces a certificate:” “I certify that, to the best of my knowledge and belief, the applicable requirements set out in practice guide 82 for the use of conveyancer-certified electronic signatures have been satisfied.” This certificate together with the completed PDF document is submitted with the application. The certificate can be given by any conveyancer but must be in their individual name and not that of the firm.

Amendments to a deed electronically signed.

However, if it is discovered that the deed signed electronically requires amending, there is no paper document that can be amended to correct the mistake(s), so in situations where a manuscript amendment might have been considered appropriate for a paper deed, there are two options:

Option 1 – The executed deed can be printed out and amendments made to the printout:

The print-out should have an endorsement added at the start: “The electronic deed of which this is a print-out is amended this day [insert the current date] as follows.”

If the amendment is considered ‘material’, the amendment on the print-out must be countersigned by the parties to the deed.

If the amendment is considered ‘not material’, the amendment on the print-out need only be signed by a conveyancer acting for one of the parties. The conveyancer should sign, print their name and provide the name of their firm/employer.

The original electronic deed and the amended print-out are uploaded with the application if the mistake was discovered before the application was submitted, or as a reply to requisition if the mistake was highlighted after submission.

An amendment is classed as material if it is ‘potentially prejudicial to [a party’s] legal rights or obligations under the instrument’ (Raiffeisen Zentralbank v Crossseas Shipping [2000] 1 WLR 1135).

Whereas an amendment is classed as not material if it has “rendered express, or had no effect upon, in the sense of adding nothing to, what the law would otherwise provide or imply” or it “merely corrects [an] error in description in accordance with the original intention” (Raiffeisen Zentralbank, above).

Option 2: Deed of rectification or variation:

The parties can enter into a deed of rectification or variation. This option can be used whether the amendment is classed as material or not material.  This option will not be effective if the amendment is intended to add additional land that was not transferred by a transfer or demised by a prescribed clauses lease. In this case, option 1 must be used.

Source of material: https://www.gov.uk/government/collections/land-registration-practice-guides Licence:

This content is available under the Open Government Licence v3.0

https://www.legislation.gov.uk/ukpga/1989/34/section/1 

 

About the authors

Priscilla Sinder qualified as a solicitor in 2005 and began her career in private practice. She moved into an in-house role soon after qualification and was appointed as manager of residential conveyancing and then head of post-completion. With the diverse experience obtained she gained a role as a partner of a boutique property firm in central London, leading to her final role as a practicing solicitor in a large nationwide conveyancing firm as a director. Throughout her career she always noticed post-completion departments lacked resources and the attention they deserved. In a bid to change this, the seed for PCC was planted in 2017 where Priscilla embarked on a journey to change the way post-completion was viewed by the industry. This then gave rise to the birth of the Hub in 2024. Priscilla is also the author of Client Care in Conveyancing and co-author of Post-completion: A Conveyancer’s Guide to Process, Risk and Compliance, 1st Edition, published by the Law Society.

 

Maria Hardy is the company trainer and technical specialist at the PCC Education Hub. She has 20 years’ experience in the residential conveyancing profession, the majority of which has been spent focusing on post-completion duties. Maria started her career in 2005 after completing her LLB at the University of Newcastle upon Tyne. Prior to working at the hub, her early career was spent working in professional negligence, and from 2014 to 2023 Maria was head of post-completion and the compliance officer for a large residential conveyancing firm. She then became manager at PCC from 2023 – 2024. Maria’s vast experience allows her to specialise in post-completion, risk, compliance and training.