The Land Registry, the Delhi metro and elephants

Anyone who has been to Delhi since 2010 will no doubt have ridden on a very impressive, modern underground built for the Commonwealth games that year. It is, compared to some of the tube journeys in London, a much more pleasant experience. It was also constructed some 150 years after the world’s first underground railway was opened in London in 1863. London has an underground that creaks and requires continual modernisation, whilst other cities have the advantage of implementing systems that capture all mod-cons.

Our Land Registry is much like the London Underground. It was one of the first of its kind when created, a year before the London Underground, in 1862. It is underpinned by legislation that is almost 100 years old and is in need of constant modernisation.

The latest running repair is a consultation on proposals to digitise the conveyancing process. Initially the trial will be limited to the use of e-signatures for mortgages to individuals where the property is not changing hands, but the intention is to create a framework for the eventual inclusion of electronic charges for corporate borrowers, transfers and potentially other instruments such as leases beyond that.

Currently the Law of Property Act 1925 (1925!) requires most conveyances and mortgages to be made by deed. Until now this has of course meant physical documents and wet ink signatures, often witnessed by a third party. The proposals include changes to the rules under section 91 of the Land Registration Act 2002 to allow documents signed electronically to be regarded as deeds.

How will this work in practice? In brief the Land Registry will create the e-mortgage templates in conjunction with the lenders and host them on the Land Registry Portal. Conveyancers will then access the site and insert the relevant reference number to access a link to the e-mortgage which can then be circulated to the client. The individual will then need to go through a verification process to be able to "sign" the document electronically. Anyone used to filing self-assessments on the HMRC website will be familiar with the process which will include unique reference numbers and one-time access codes, sent by SMS for example.

This is clearly a step in the right direction for the Land Registry and lays the foundation for secure paperless transactions and all the benefits you would associate with that. For these reasons the proposals should be encouraged during this consultation. It is however bittersweet when you consider that this comes some 15 years after the concept of e-conveyancing was first targeted and nine years after the "Land Registration (Electronic Conveyancing) Rules" were made in 2008. It is positive that these new proposals are a lot wider than those contained in the 2008 Rules but the lack of any real roll-out in the intervening nine years is disappointing. The proposals cite a lack of appetite and a period of "consolidation" in the market following the banking crisis as a reason for the delay.

The elephant in the room is of course blockchain technology, which is already being trialled on elements of the land transfer process in Sweden and registration of land in the Republic of Georgia. Honduras, Peru and Dubai are also actively looking at applying blockchain technology to their own land registries. Secure, open, displaying transactions in real-time and more efficient (and therefore cheaper), it is surely only a matter of time before this is the technology to which land registries across the world will be turning. It is only a shame that, unlike underground railways, we won’t be showing the world the way forward.