At the start of the COVID-19 lockdown we provided clients with the ability to e-sign documents that do not need to be registered at the Land Registry because Womble Bond Dickinson is fully licenced to use DocuSign, a market leading e-signature platform. As an early adopter of e-signatures in the legal sector, using this technology to sign contracts and other documents was an easy step for us to take to help our clients continue with their transactions. 

Up until now, the Land Registry's policy has been to insist on wet ink signed documents for registration. Over the past weeks this has required lawyers and clients to grapple with printers and stamps whilst working from home and fill risk gaps with undertakings and contractual obligations to send on wet ink signatures at the end of the lockdown.

On Friday 1 May the Land Registry announced it would temporarily relax its signing requirements for "dispositionary deeds", allowing the use of Mercury signatures. We welcome this announcement which has followed representations made by the legal community in response to the COVID-19 crisis. Temporarily accepting Mercury signatures will enable the industry to operate more efficiently in the current circumstances, but there are some gaps in the detail which we hope will be resolved shortly. We encourage the Land Registry to make permanent changes, including the acceptance of e-signatures generated through platforms such as DocuSign, as part of a post lockdown review of real estate transactions.

So what does a Mercury signature look like?

  • A Mercury signing can only take place if all parties to the transaction agree. In most circumstances we would expect everyone to agree this at an early stage, but pending clarification from the Land Registry we do not believe that a Mercury signing can take place if at least one party is to execute the document under seal. Some organisations, such as public bodies, may not be able to change their execution process which requires a seal in response to this development
  • The signatory is emailed a full copy of the agreed form document with a separate signing page
  • Where a party executes by one authorised signatory (typically a director) signing in the presence of a witness, the director prints the signature page and they and the witness signs as usual and the director sends back a scan or photo of the signed page together with a full copy of the agreed form document. The witness must be physically present during the signing but can be an adult member of the signatory's family
  • Where there are two authorised signatories (typically directors), the first director prints the signing page, signs and then sends a scan or photo of the signature page with a full copy of the agreed form document to the second director, who must print, sign and send back a scan or photo of the signature page (now with two signatures) together with a full copy of the agreed form document. The Mercury procedure requires that the signed page is always circulated and returned with a full copy of the agreed form document so that it is clear which document is being entered into.

There are gaps in the Land Registry announcement that we hope will be clarified over the coming days. Currently the Land Registry is only accepting Mercury signatures for transfers, leases, charges and other dispositionary deeds, so wet ink signatures are still required for consents and the discharge of charges. The new policy will apply "until further notice", and lenders in particular may be concerned by the uncertain timeframe.

Many clients will be relieved with the pragmatic approach taken by the Land Registry in response to the new norm of homeworking, but acceptance of Mercury signatures cannot be regarded as a magic bullet. The Land Registry must work towards accepting signatures created in commercial e-signature platforms like DocuSign and allow us all to take full advantage of the new ways of working offered by technology. For documents that do not need to be registered at the Land Registry, we continue to recommend the use of e-signatures for speed, convenience and maximum efficiency. Further details about WBD's use of DocuSign can be found here.

This article is for general information only and reflects the position at the date of publication. It does not constitute legal advice.