To enable businesses to continue to transact during the pandemic, digitalisation jumped into the driver's seat and pressed the accelerator pedal firmly to the floor. Almost three years later and with flexible working now the norm in many organisations, e-signatures are continuing to play a key role in that digitalisation. But is everyone in the fast e-signature lane?
We've had conversations about e-signatures with many of our clients, but the lending sector is still feeling its way here. Issues to be considered include:
For overseas lenders, e-signatures can only be used if they are a valid method of execution in the relevant jurisdiction.
Witnessing requires extra thought
If the borrower executes by way of a single director who signs in the presence of a director, the witness must still be physically present and see the signatory apply their signature to the document on-screen.
Land Registry requirements
The Land Registry began accepting e-signed documents for registration in July 2020, subject to certain conditions being met. A key requirement is that all parties must be represented by a "conveyancer" and a "conveyancer" must set up and control the e-signing process. While the Land Registry has relaxed these requirements when consent is needed under a restriction (which are typically registered against a title to protect a charge), DS1s can only be e-signed in accordance with all the Land Registry requirements, which makes it difficult for them to be e-signed using a lender's own e-signing platform.
Lenders who operate in both England and Wales will need to grapple with the different requirements of the Land Registry and Registers of Scotland. The good news is that Registers of Scotland started accepting documents signed by qualified electronic signatures (QES) from 1 October 2022. A QES signature is a more secure and expensive type of signature that does not require witnessing than the standard e-signature typically used in England, so different e-signature policies will need to be developed for the two jurisdictions.
Signatories love the speed and convenience of e-signatures. If you are still exploring their use in your organisation, we have the expertise to help you start your journey.