One of the unintended outcomes of the Covid-19 pandemic was an acceleration of the use of technology in many areas of life and society. The need to keep people distant from each other and avoid face-to-face interaction saw many traditional practices fall by the wayside.
One of those was the need for a property deed to be physically signed with a ‘wet ink’ signature to meet the formal requirements under the Property Law Act 1974. The signing of a deed on ‘paper, parchment or velum’ has traditionally been more a formal process than an average contract, primarily because the document can bind both parties immediately on signing and has a longer limitation period.
Allowing parties to sign a deed electronically was temporarily introduced earlier during the onset of the pandemic but in November 2021 was made permanent by the passing of the Justice and Other Legislation Amendment Act 2021 (Qld), amending the Property Law Act.
The change to permitting e-signatures of property deeds both addressed the impracticality of signing such documents in person and brought Queensland into line with other jurisdictions such as NSW and Victoria.
What is required to electronically sign a deed?
The new rules for the signing of deeds mean an electronic signature, affixed remotely, is now allowed provided an ‘accepted method’ is used. This phrase means that:
- the method of signing the deed must identify the signatory and the signatory’s intent to be bound;
- the signing method used must either be:
- as reliable as appropriate for the purposes which the document is made or signed, having regard to all the circumstances, including any relevant agreement; or
- proven in fact to have identified the signatory for the document and their intention to be bound, by itself or together with further evidence; and
- the signing method used must be consented to by each of the document’s signatories.
‘As reliable as appropriate’ means that the number of steps taken by the signatories to ensure the veracity of the document depends on its importance. ‘Proven in fact’ again means the parties to the deed should take steps to verify the e-signature of the other.
Meeting the requirements of the amendments can be achieved by using one of the widely accepted and reputable e-document platforms such as DocuSign and properly checking the emails and contact details of the other signatory. Signing a deed that arrived from an unfamiliar email account or a person you’ve not previously dealt with are obvious warning signs the other signatory may not be genuine.
It should be noted that the legislative change does not prevent signatories to a deed using the traditional method of a wet-ink signature made in person. In fact, parties to the deed can execute using both electronic and wet-ink signatures – provided they both sign identical counterpart documents.
Importantly, witnesses will no longer be required for an individual’s execution of a deed.
Signing of deeds by companies
The new requirements do not limit the way corporate entities can sign a deed, meaning companies can execute a document as a deed by signing it with either a wet-ink signature or with an electronic signature. Split execution by directors is also permitted provided the directors sign identical counterparts.
Execution of a deed without using the company common seal – as was traditionally required – is achieved by the signing of:
- two directors of the corporation; or
- one director and one secretary of the corporation; or
- for a proprietary company that has a sole director—that director, if a. the director is also the sole company secretary; or b. the company does not have a company secretary; or
- a lawfully authorised agent or attorney of the corporation, whether or not the agent or attorney is appointed under seal.
Split execution of the deed by company directors is also permitted provided they sign identical counterparts. Witnesses are not required for a corporation’s execution of a deed.
Exceptions to the new rules
Some documents are excluded from the new provisions allowing for e-signing of deeds, including:
- Powers of attorney – a document containing a power of attorney cannot be executed with an electronic signature because of the unique risks involved in the granting of the power. The exclusion does not apply if the power of attorney is part of a commercial or other arms-length transaction and the purpose of giving the power of attorney is for the purpose of the commercial arms-length transaction.
This means common documents such as mortgages, leases and contracts for sale; contracts for off-the-plan sales of community titles scheme lots; contracts requiring dealings to be signed and registered after settlement, where the buyer grants an irrevocable power of attorney in favour of the seller to sign a dealing if the buyer fails to do so within a specified timeframe; or development agreements, co-ownership agreements and joint venture agreements, are not subject to the exclusion. - Titles Documents – documents covered by the Land Act 1994 (Qld) or the Land Title Act 1994 (Qld) may still need to be signed on paper with wet-ink signatures. Consult a property law expert for guidance when signing a document handled by Titles Queensland as to its proper execution.
Consult our property law professionals
The Queensland amendments explained above applies to deeds and powers of attorney made on or after April 30, 2022. A deed entered into in another state may be subject to different formal requirements and specialist legal advice should be sought.
At Big Law, advising clients on the formal details of property transactions, including entering into a deed, is one of our specialties. Contact our office today for any further information on the issues raised in this article.
