Kent sale pioneers online contracts
The sale of a restaurant in Faversham would not normally excite the UK’s leading property lawyers. However, a deal in the Kent town which completed on 29 October was the first exchange of contracts to be completed online.
Last month, Singer Vielle Sales, the agency that ran the transaction, confirmed that Monmouth Properties had sold the Brewmasters House on Court Street to BHM Four for £1.02m. It says it has completed two further investment transactions using the same system. The deal shows there is a legally binding way to exchange contracts online and that a signature is no longer required to make a deal legally binding.
The firm bypassed the conventional need for signatures by working with Paul Springall, partner at law firm Howard Kennedy. Springall created a system that combined an affirmation process – which confirms that the prospective buyer wants to bid – with a unique digitally encrypted electronic signature.
“An electronic signature by email is not legally binding,” says Neil Singer, senior partner at Singer Vielle Sales. “You can’t just have an electronic signature, and you can’t just have an affirmation process. You have to have both.”
Singer says the system, known as Click to Purchase, would mainly appeal to investors from overseas that want to buy properties in the UK, as it obviates the need to send paper copies of legal documents across the world.
Buyers find the property they want on the Singer Vielle Sales website, give their details and can then access all the legal documents about the property, including the contract. They can then submit bids, which are confirmed by email, and withdraw their bids at any point unless the offer has been accepted.
When the deal is accepted, it becomes legally binding between both parties.”