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Electronic signatures - lease extensions and enfranchisement where are we now?

The Covid-19 Pandemic has highlighted problems with manuscript signatures and postal delivery of notices for tenants seeking extended leases and collective enfranchisement. The  legislation requires such notices to be “signed” by or on behalf of the tenant. It may be difficult to get  “wet ink”  signatures. Even where a tenant has an agent, it may be difficult to get compliant or duly authorised signatures of a corporate tenants, if located in other jurisdictions. Since 2014, in England (but not Wales) it has been possible for such notices to be signed “on behalf of” tenants. This begs the question – what is a valid signature for these notices?

Before Covid-19, the  Law Commission thought electronic signatures  could  be used to “validly execute” a document if the person signing intended to authenticate the document  and “formalities” were satisfied.

Electronic signatures come in different formats. Commonly a scanned hand written signature will be attached to an electronic or hard copy document intended to be a notice. There are  also web based e-signing platforms.

Electronic signatures are admissible to prove the “authenticity” of a document under the Electronic Communications Act 2000. That does not establish whether  the signature upon the notice is valid.

The question whether an electronic signature incorporated into a document is a valid signature or constitutes a valid notice has not been authoritatively decided. There are conflicting decisions of lower Courts. Cowthorpe Road  v Wahedally (2016) held a counter notice was not validly given by e-mail as it was not “signed”.  Although this decision has been described as “unfortunate”  it has not been overruled by a Higher Court. The Court in Achieving Perfection v Gray (2015) thought an initial notice asking for collective enfranchisement sent by e-mail was a valid notice.

Alco Realty v Davis (2020) considered that a photocopy of a notice asking for a lease extension signed by a duly authorised agent would  be validly given as a notice even though it contained a copy or “facsimile” of the signature.  The notice in Davis was invalid as it had not been duly  signed by the tenant’s solicitors in a compliant manner.

County Court decisions do not provide authoritative guidance on electronic signatures and are not binding on other  Courts. A decision of a higher Court would be required to provide some certainty.

Those decisions do not provide guidance whether typing a  name on an electronic document, such as an email, or in the signature block, would suffice for lease extension or collective enfranchisement notices.  In Neocleous v Rees (2019), the   Court found an “automatically” generated email footer containing the name and contact details of the sender constituted a “signature” for the purposes of legislation  relating to the validity of contracts for the sale of land. That decision does not affect lease extension or enfranchisement notices.

Scans of the signature page signed and sent by e-mail were held to amount to valid delivery of  personal guarantees by the High Court in Umrish v Gill (2020). Unfortunately, Gill does not provide authoritative guidance for tenants signing enfranchisement notices.

The flow of these  recent decisions appears  to clearly favour electronic signatures and notices delivered by electronic means. However,  the cost of litigating to obtain that certainty should alert practitioners to the risks associated with electronic signatures and electronic delivery of notices.  Agreed protocols (such as the ALEP Protocol for Service of Initial Notices and Counter-Notices during COVID-19) may have a role to play  where a landlord is co-operative. Unless a clear procedure is agreed, tenants using “electronic signatures” for notices do so at their own risk.

 

Howard Lederman  is a Barrister  at 42 Bedford Row London WC2R 4JL  and acted for the landlord in Alco Realty v Davis (HowardL@42br.com)


24.08.2020