This advisory outlines temporary changes introduced by the HM Land Registry in May on how to validly sign documents being executed as deeds for Land Registry purposes through a five step process that satisfies options and restrictions proposed in 2010 by the ‘Mercury Rule.’
On Monday 4 May, HM Land Registry introduced temporary changes to how documents being executed as deeds can be validly signed, so that they would be acceptable for Land Registry purposes.
The historic position
Recent guidelines on executing documents as deeds can trace their origins back to the decision in the 2008 High Court case, Mercury Tax Group Ltd v HMRC. Here, the judge held that a page containing original wet ink signatures cannot be transferred from an incomplete document on to another, in order to effectively execute a complete and amended final version of that other document.
However, this isn’t helpful where there are logistical problems in getting all signatories together to sign documents or timing issues in posting final agreed versions of documents to signatories. This led to the overly formal practice where full versions of documents were being printed and returned to conveyancers after signing, regardless of how large the documents were.
Signing deeds to satisfy the ‘Mercury Restrictions’
In 2010, a joint working party, including The City of London Law Society, in response to the Mercury ruling, proposed various options for signing documents in a way that do not fall foul of the Mercury ruling, and the Land Registry have now announced that one of those options will be accepted by it when registering deeds.
The five step signing process, which the Land Registry requires for an acceptable ‘Mercury Approach’, is as follows:
- Step 1: Final agreed copies of the document are emailed to each party by their conveyancer;
- Step 2: Each party prints the signature page only;
- Step 3: Each party signs the signature page (in pen) in the physical presence of a witness;
- Step 4: The witness signs the same signature page; and
- Step 5: Each party sends a single email to their conveyancer, to which are attached the final agreed copy of the document and a PDF/JPEG or other suitable copy of the signed signature page.
The update to the Land Registry accepted policy will remain in force until further notice.
It should be noted that the Land Registry are still not accepting electronic signatures for the registration of deeds, and the requirements for witnessing a document have not changed (i.e. witnessing must be done in person and cannot happen over a video call).