Tuesday, 8 April 2008

Electronic Conveyancing

The Law of Property (Miscellaneous Provisions) Act 1989[1] requires that contracts concerning real property to be in writing and signed by the parties or their authorised agents. The Land Registration Act 2002[2] [LRA] (which replaced the Land Registration Act 1925) has introduced changes allowing the introduction of Electronic conveyancing. The act has made the introduction of electronic conveyancing system possible. It has created a framework designed to allow the creation of interest in registered land electronically. Chapter 8 of the act expressly deals with electronic conveyancing.

Section 91(1) provides that Chapter 8 would apply to a document in electronic form only if:
(a )the document effects a disposition falling within s 91(2); and
(b) the conditions in s 91(3) are met.
A disposition will fall within s 91(2) if it is:
(a) a disposition of a registered estate or charge, or
(b) a disposition of an interest which is the subject of a notice in the register, or
(c) a disposition which triggers the requirement of registration.
The conditions in s 91(3) are as follows:
(a) the document makes provision for the time and date when it takes effect,
(b) the document has the electronic signature of each person by whom it purports to be authenticated,
(c) each electronic signature is certified, and
(d) such other conditions as rules may provide are met.

In addition, in s 91(10), The LRA is expressly linked to the ECA:
In this section, references to an electronic signature and to the certification of such a signature are to be read in accordance with section 7(2) and (3) of the Electronic Communications Act 2000 (c. 7).

It was clear that the ECA by itself did not adequately cover the provisions needed to ensure that contracts for the purchase and conveyancing of land could be completed electronically. As a result, s 91(4) of the Land Registration Act required the addition of provisions stating that a document satisfying the above requirements would be regarded as "in writing and signed by each individual, and sealed by each corporation, whose electronic signature it has" and that the document is also satisfy the role of performance creating a deed.

The parties to the deed need ensure that the electronic form states the time and date of effect as well as being signed using the electronic signature of both parties. Further, each electronic signature must be certified according to the land registration act. In this instance, the LRA effectively renders the electronic document to be in writing. The explanatory memorandum of the land registration act states, "the section does not disapply the formal statutory or common law requirements relating to deeds and documents but deems compliance with them. When the section applies, the electronic document is therefore to be treated as being in writing, having been executed by each individual or corporation who has attached an electronic signature to it, and, where appropriate, as a deed"[3].

Logically, it follows from the requirements to implement the LRA that the ECA alone was not able to mitigate uncertainty in the provisioning of electronic conveyancing in a satisfactorily manner. Again, this shows that although the ECA is a necessary step forward, it in itself was not capable of removing all uncertainty in electronic contracting.

[1] Law of Property (Miscellaneous Provisions) Act 1989 (c. 34)
[2] Statutory Instrument 2003 No. 2431, The Land Registration Act 2002 (Transitional Provisions) (No 2) Order 2003
[3] [LRA 91]

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