06 Dec 2016

Digital signatures for residential leases

With the introduction of bespoke software providers advertising the ability to execute residential leases electronically (digital signatures), we are regularly being asked – can such services be used in Scotland?

The Requirements of Writing (Scotland) Act 1995 (RWA) does recognise electronic signatures as ‘writing’, and has done so since the commencement of the relevant parts of the Land Registration (Scotland) Act 2012.

I would point out that, in terms of the RWA, there is no requirement for leases of less than 12mths to be in writing at all. However, with regards to residential leases that are Assured or Short Assured Tenancies there is a duty to provide written terms and for those terms to be ‘probative’ or self-proving. This provision is mandatory albeit there is no direct sanction for failure to comply with same.

The expression ‘written terms’ under the Housing (Scotland) Act 1988 Act is not the same as ‘writing’ in the RWA. The important bit is the obligation to provide a ‘probative’ lease under the Housing (Scotland) Act 1988.

In terms of the Electronic Documents (Scotland) Regulations 2014 “writing” for the purposes of the RWA is defined as meaning an “Advanced Electronic Signature” (AES) by Regulation 2. For self-proving electronic documents, Regulation 3 states that what is required is an AES and a “Qualified Certificate”.

For definitions of AES and Qualified Certificates, we require to look to the provisions of the Electronic Signatures Regulations 2002.

So, for the purposes of residential leases – that are Short Assured or Assured Tenancies – you do require to provide a written lease that is ‘probative’. If you wish to do that by way of electronic documents and signatures you can do so, but in order to fully comply with the requirements for such leases, you will need an AES and a Qualified Certificate that meet the requirements of the 2002 Regulations.

Whether a provider’s system meets these requirements is another matter, but if it does, then it can be used in Scotland now for the completion of the lease documentation itself.

A final word of warning though, whilst leases themselves may be capable of electronic completion, and in certain circumstances Tenant Information Packs can be intimated electronically, the provisions of section 32 of the Housing (Scotland) Act 1988 relating to the service of the prescribed AT5 notice have not been altered. Service of that notice is still regulated by section 54 (which does not specifically provide for electronic intimation or delivery) and it still needs to be served before the ‘creation’ of the lease in question, failing which you may fail to create a Short Assured Tenancy and create an Assured Tenancy by default.

If you wish to discuss this or any other private tenancy matter, please contact Rory Cowan.