There has been a substantial shift in the way that business is carried out in a virtual world following the peak of the pandemic last year. When the pandemic hit and once the property market opened up again, questions were raised as to how deeds could be witnessed and paperwork completed when strict lockdown rules remained in place.
Mercury signing methods allow parties to transact without holding wet-signed documents, which has, for a long time been a strict requirement in dealing with property transactions.
In 2008 a court case - R (Mercury Tax Group Ltd) v HMRC (2008) EWHC 2721 (Admin) – now known as “the Mercury case”, gave birth to what is now known as the Mercury signing method. It was originally endorsed by the Law Society in 2009 and was accepted by the Land Registry from May 2020 during the Covid-19 pandemic. The Land Registry’s announcement allowed pressure to ease off the housing market and overcome any logistical issues imposed by lockdown measures.
Mercury signing is a way of executing documents. It is a recognised form of executing deeds and means that transactions can proceed smoothly, despite parties being physically distant from each other or their solicitors. However, parties should be aware of changing land registry guidance and keep abreast of updates that may affect the way the transactions take place.
All parties, solicitors included, will need to agree to Mercury signing being used before the process is started. Although the method may be used for numerous documents, the following steps apply if the document being signed is a transfer deed:
The Law Commission has agreed that the final version of the document with the PDF signed signature pages attached to the same email constitute to original signed document and equate to the “same physical document” referred to in the Mercury Case.
The land registry will accept the following deeds signed in accordance with the above method:
The decision in the Mercury case also noted that the above method can be used for the signing of property sale contracts too.
As long as the guidance remains in place and all parties are in agreement to using this form of signing, this means that if parties are not able to send wet-signature transfer deeds or contracts back to their solicitors in time for exchange or completion, then Mercury signed documents will be sufficient for the transaction. Logistics should not prevent transactions from taking place, if parties are either abroad or not local to their solicitor’s offices. Parties should keep alert to any changes and announcements made by the land registry which may affect the use of Mercury signatures.
If you have any more questions or would like more information regarding Mercury signings, you can contact our Residential Property Team below.