Edging towards digital
By Sarah Dwight
The pandemic has highlighted the need for secure digital signings and identity checks, explains Sarah Dwight
Conveyancing firms were faced with many challenges when the country went into lockdown on 23 March. Not only did the initial government guidance say people should work from home – but people could still move house.
Those conveyancing firms where staff already worked from home, or had case management systems in place so that staff could work from home as needed, could continue to provide services with a minimum of interruption.
Firms worked hard to get their staff set up to work from home in compliance with the guidance, but many were office-based and so it was harder for those firms to set up teams of staff working from their own homes.
Alongside these practical issues, some people had already exchanged contracts and completion was imminent. However, the law allows little if any room for manoeuvre once an exchange of contracts has taken place. The standard contractual position is that the person who can complete can serve notice on the defaulting party by giving ten working days in which completion should take place.
The deposit is instantly forfeitable and interest would accrue on the purchase price until completion takes place. It was hoped that the parties would work together to try to agree a new completion date, but this was difficult considering that although solicitors were ‘still open for business’, removal companies and estate agents were not.
If contracts had not been exchanged, it was possible to include a clause in the contract to cover the issue of a potential delay due to covid-19; but this would need to be adopted by all parties in the chain as it was important that the risk was shared between all parties.
And while all this was happening, there were also questions about signing documents, identity checks and other matters that conveyancers deal with as a matter of course in normal times.
When the market reopened, the Law Society issued further guidance and information for conveyancers, to enable sales and purchases to be carried out safely while social distancing measures were eased – or increased – in line with government guidance.
There is extensive guidance for conveyancers and clients, all of which is useful reading. There is also cross-industry guidance which considers the matters estate agents should consider when marketing properties and carrying out viewings; what surveyors should ask before carrying out a viewing, such as leaving loft hatches open; and what removal companies should be doing.
Social distancing is one of the most important considerations for all the professionals involved in the house-moving process but
it is easier for some than others, for example, it’s difficult for two removal men to
maintain social distancing while moving a washing machine. But what about conveyancers and the other challenges we’re now facing?
The government has recently indicated that people should go back to their offices where possible. The Law Society has produced excellent guidance about returning to work entitled Safe Return To The Office: Toolkit For Firms. This covers many aspects firms should consider when returning their staff to work in their offices, including advice on what should be done if there is a covid-19 outbreak in the office.
There is also advice and guidance for firms once they have asked the simple question whether clients can come into the office. The guidance states: “If possible, meetings with clients should be conducted remotely.”
The government guidance states that before reopening offices a risk assessment should be conducted; measures on cleaning and social distancing should be in place; and a protocol developed for visitors which includes signing them in and out, having a host and conducting briefings. There are also rules
on meeting rooms.
Though many firms say in their email footers that their offices are open, meetings are by appointment only. Gone are the days where clients just turned up to return their signed documents. We are asked to consider whether meetings are necessary or whether the documents can be sent through the post for signing.
For years, I thought that clients liked the idea of coming to meet me in person and chatting about their house moves with me. Now, I am not so sure and think that perhaps they were doing it because they thought they had to. Clients are happy to sign documents and return them – but this created other issues in relation to witnesses. Not all conveyancing documents require a solicitor to act as a witness but we would ask for an independent witness (ie not a family member), however, if people are self-isolating, this limits who can witness documents.
HM Land Registry has acknowledged that one of the most frequent questions asked during the lockdown period concerned the witnessing of documents. We know that deeds must have a wet ink signature but Land Registry has stated that it will soon start to accept witnessed electronic signatures and then take steps to ensure that digital signatures can be used.
At present, Land Registry accepts deeds that have been signed using the Mercury signing approach (the details of Mercury signings are set out in practice guide 8 on the execution of deeds). To comply with its requirements and for land registration purposes, the signature page needs to be signed in pen and witnessed in person (not by a video call). The signature must then be captured, with a scanner or a camera, to produce a pdf, jpeg or other suitable copy of the signed signature page.
Each party then sends a single 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 needs to be confident that a document has been signed in a way that would give it proper legal effect, that the process was secure and the risk of fraud has been minimised. With this in mind, it has stated it believes qualified electronic signatures are the right long-term component of the digital future. In the next few weeks, Land Registry is to issue its practice note on how qualified electronic signatures may be used.
And what about identity checks? Land Registry has said that this crisis has highlighted the immediate need for an easy-to-use, modestly-priced, remote and digitally secure way for conveyancers to securely identify the buyers and sellers of a property.
As the market for conveyancing services expands again post-lockdown, conveyancers will be looking for solutions to distanced working. There are almost 4,000 active conveyancing businesses which are looking to providers to give them the safe and secure solution they can rely on deliver great customer service at a distance.
Land Registry has made changes to its evidence of identity requirements because of the covid-19 outbreak. You can find these in the guidance contained in practice guide 67A, which must be read in conjunction with the existing practice guide 67. You should note, however, that these changes are temporary and may be modified or withdrawn at short notice.
One of the effects of covid-19 has been to galvanise different stakeholders to work together to assist conveyancers in carrying out their vital role as the gatekeepers for the system.
Sarah Dwight is a sole practitioner and sits on the Law Society’s Conveyancing and Land Law Committee. She also leads the committee’s residential property working sub-group