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Posted by TC Young Solicitors on August 20, 2015
On 1 July 2015, the Legal Writings (Counterparts & Delivery) (Scotland) Act 2015 came into force marking a significant change in the way that residential leases can be signed.
Although there have been arguments within the legal profession regarding whether or not counterpart signing has always been possible, this point has not been widely accepted. Prior to 1 July 2015, the general consensus was that all parties to a lease must sign one principal document. This caused issues, for example, when joint tenants resided abroad and were not able to come into the agent’s office to sign the documentation. The new Act confirms that execution of documents can be done in counterpart and further, that delivery of these documents can be done by electronic means.
The Act allows the agent (or landlord) to email the prospective tenant(s) a copy of the lease to be signed. Both landlord and tenant(s) each sign separate copies. These can then be exchanged either by sending hard copy by post, or scanning a signed copy by email to each of the other parties. Once all parties have received the other parties’ signed copies, the lease is concluded. The counterparts are deemed to form a single document.
Alternatively, parties can agree that the counterparts must be returned to a “nominated person” (this can be one of the parties or their agent). The tenant(s) print a copy of the lease, sign it and then send either a hard signed copy by post, or a scanned signed document by email, to the “nominated person”. Once the “nominated person” has the full set of scanned signed leases, the lease is at that point concluded.
The explanatory notes to the Act state that parties who wish for registration of the lease or for other purposes, should gather in the hard copy signed pages in order to create a collated version of the document for such a purpose. With that advice in mind, it might be sensible that the landlord or agent request that the signed hard copy documents are sent to them by post (or hand delivered to their office) in order that the principal documents are retained, should the agent or landlord require to rely on that principal document in relation to legal action (i.e. repossession or debt recovery).
An alternative option is that the “nominated person” can send the lease by email to the tenant(s), who would each sign as many copies as there are parties to the lease (e.g. if there is one landlord and two joint tenants, then three copies each are signed). All of the signed copies would then be sent to the landlord or agent who would check that all have been signed appropriately and then provide a complete set of the documents to each party. The lease would be deemed to be properly executed at the point that all copies had been received by the “nominated person”. By using this option, the landlord or agent can ensure that they hold the executed hard copy documents, for future use if required.
It is important to distinguish the options outlined above from the issue of digital signatures on leases. Digital signing presents great problems due to the requirement for formal registration of the digital ‘signature’ of both tenant and landlord with a licensed provider, something which most tenants are unlikely to have done.
Please feel free to contact our LetLaw Team if you wish to discuss any of this further and how this may affect your day to day practice.