‘Wet signature’ still required for mortgage deeds despite Land registry relaxations

At the beginning of May, with Covid restrictions in full swing, Land Registry made changes to the ‘Mercury’ signing rules for documents and deeds.

The ‘Mercury’ approach facilitates virtual signings where one or more signatories are not physically present at the same meeting.

Simon Davis, president of the Law Society of England and Wales, welcomed the change saying:

“These changes help to improve processes for transactions in a difficult environment – they are both pragmatic and proportionate.”

Now, it seems, there seemed to be some confusion as to whether a digital signature deemed a mortgage deed validly executed.

Mortgage Finance Gazette is carrying an interview on the subject with Jonathan Newman,  senior partner at Brightstone Law, who says:

“It is important to clear up the first point as to whether we are referring to a document or deed and the specific characteristics of the deed, for example, a deed which deals with the disposal of an interest in land – i.e. a mortgage deed.”

“The key point in the Land Registry’s announcement which seems to have been missed is that mortgage deeds “must still be signed in pen and witnessed in person” to be valid and enforceable.”

This appears to have implications for sales/legal progression.

You can read the article here.

 

After this story was published HMLR contacted EYE with the following clarification:

There appears to be some confusion regarding Mercury signing. We will accept any dispositionary deed that has been Mercury signed in accordance with our requirements set out in Practice Guide 8, and the grant of a charge (i.e. a mortgage) is a disposition.

Our guidance can viewed here

 

Land Registry announces changes to ease Covid-crisis conveyancing

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2 Comments

  1. iainwhite87

    Totally preposterous in this day and age

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  2. #ImpressiveConveyancing

    Indeed, hence why e-signatures are a complete waste of time at the moment within the conveyancing industry. The same for powers of attorney.

    Nobody wants to receive a photocopy – that is whatan e-signature is – of a document, when the real thing acts as another layer of ID.

    ID being SOOOOO crucial in the conveyancing industry at the moment which is currently under threat from frausters.

    Unless there is a website available to the whole country, where you can upload documents – free – and 100% secure and Government/CML sanctioned – then we have a whole range of companies out there misleading and trying to offer their IT sevrices.

    Signing a document then scanning it back is hardly novel, we could have asked for that the moment scanners were invented. Wet signatures make the document the original. If not wet, then it is a copy. Or UNLESS made digitally and there is a 100% ‘chain of evidence’ from signer to recipient…but that process is not allowed or available across every document where signatures are needed…YET.

    That’s the problem – gerat ideas, but always coming before the necesarry systems are in place e.g lpaperless law firms, fine, but have dynamic lawyers able to compensate for being paperlsss, and more importabrly, the IT system to allow paperless.

    Wet signatures will end, eventually, but it needs to be thought through far better.

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