The next step on the road to electronic conveyancing has been taken by the introduction in the House of Lords last week of the Land Registration Bill. The Bill follows the joint consultation undertaken by the Law Commission and the Land Registry in September 1998. The full results of that consultation will be published in July and the July paper will contain a detailed discussion of the policy behind the recommendations and full explanatory notes on each clause of the draft Bill.
The publication of the Bill also predates the close of the consultation by the Lord Chancellor's Department on "Electronic Conveyancing - a draft order under section 8 of the Electronic Communications Act 2000" - this was the consultation paper issued at the end of March raising the issue of whether electronic property contracts should be legally permitted. Although the Government is keen to press ahead with the "electronic revolution", it is perhaps a little surprising that the Bill has been introduced even before the end of the consultation period.
What is also surprising is that the Bill anticipates that electronic conveyancing will become compulsory at some time in the future. This contradicts previous suggestions that the use of electronic conveyancing documents should be voluntary. The Bill, however, makes it clear that the Lord Chancellor will only be able to make electronic conveyancing compulsory once he has consulted such persons as he considers appropriate.
The other clauses dealing with electronic conveyancing follow the format suggested in the recent consultation paper on electronic conveyancing. The electronic document must record the date and time when it is to take effect, the document must bear the electronic signature of each person who must authenticate it and each of those signatures must be certified. Because of the fast moving world of technology, the Bill provides for further rules to be made adding other requirements to aid the security of transactions. It remains to be seen if these rules satisfy those who have expressed concern over the security of digital signatures.
Whilst the Bill intends to give a thorough overhaul of the land registration system, its main aim is to enable an effective system of electronic dealing with land. To further that aim, other proposals in the Bill require the compulsory registration of all leases over seven years in length. Compulsory registration of leases over seven years is proposed by the Bill - again this is a change to the March consultation paper which suggested that leases of over 3 years should be compulsorily registrable. The importance of this is that it is only leases that are registrable which will be permitted to be created electronically.
We will comment in further detail on the full implications of the Bill following the issue of the July paper.
For further information please contact Mark Heighton at mark.heighton@cms-cmck.com or on +44 (0)20 7367 2177 or Caroline Potter at caroline.potter@cms-cmck.com or on +44 (0)20 7367 2721.
