This blog is the second in our series of posts taking us ‘back to basics’. In the series we touch on some of the key legal requirements and various key aspects of a banking transaction, highlighting some of the standard clauses and the impact these have on security documents.
This week, Talking Finance reviews the importance of witnessing deeds. If a deed is not properly witnessed its validity is open to challenge and it may be unenforceable. Despite this, there is surprisingly little legal guidance on witnessing.
What needs to be witnessed?
In circumstances where a deed is required – such as land transfers, leases, mortgages and charges, appointments of trustees, powers of attorney, and security releases and variations – the deed must satisfy certain statutory requirements, one of which is the need for the signatures to be witnessed.
There is no legal requirement for a simple contract to be witnessed although it can at times prove helpful in evidence should a dispute regarding the validity of the signature to an agreement arise.
The required execution formalities for deeds differ depending on the type of signatory involved:
- Individuals must sign in the presence of a witness who attests the signature. If the individual is physically incapable of signing, another individual can sign at his/her direction in the presence of the individual and this must be done in the presence of two witnesses who each attest the signature.
- For companies/LLPs there are various methods of execution but one allows execution by a director (or member of the LLP) in the presence of a witness who attests the signature.
- Attorneys must also comply with the above formalities but the attestation clause in the document should confirm that the witness is in the presence of a relevant person acting as attorney for the signing party.
How does the witness attest?
Attest – /əˈtɛst/ – verb – to provide or serve as clear evidence of.
To attest, the witness must:
- be present;
- see the document being signed by the executing party; and
- sign a statement in the document stating that it has been signed by the executing party in their presence as a witness.
By doing so, if there was ever a question as to whether an agreement was entered into properly, the witness should be able to provide reliable evidence confirming that the document was validly executed.
What details should the witness provide?
The witness must sign themselves to comply with the statutory requirements. It is also convention to provide the name, address and occupation of the witness in legible form. This is not a legal requirement but it is best practice to include at least some of this information as it will help to trace the witness in the future, if necessary.
Who can be witness?
- Same witness – The same witness may witness each person’s signature on a deed but each signature should be separately attested, unless it is absolutely clear by express wording on the face of the attestation clause that the witness is witnessing both, or all, signatures in the presence of the named signatories.
- Party – A party to a deed cannot be a witness, so a signatory to the deed cannot attest the signature of another signatory.
- Minor – There is no prohibition against the witness being a minor, but it is important that the witness is of sufficient maturity for their evidence to be regarded as reliable. A similar rationale applies if the witness is lacking mental capacity due to illness or age. It is therefore best practice to ensure witnesses are adults with full capacity.
- Partner – A witness can be the signatory’s spouse, co-habitee or civil partner. However, given that the purpose of requiring a signature to be witnessed is to provide, if necessary, unbiased evidence, an independent witness should be used as a matter of best practice.
When should the witness sign?
There is no legal requirement for the witness to sign the attestation statement immediately after the signatory has signed the document, but it should be done as soon as possible to avoid the validity of the document being challenged. Any significant delay could raise questions as to whether or not the witness was actually present at the time and also increase the practical possibility that they forget to actually sign the deed.
How should an electronic signature be witnessed?
According to guidance, correctly witnessing an electronic signature involves another individual seeing the electronic signature being made by an appropriate signatory, whilst being aware that they are witnessing an electronic signature. For the deed to be validly executed, the witness will need to sign the attestation clause, in much the same way as a paper document, whether using an electronic signature or ‘wet ink’.
The same guidance reminds us that, for evidentiary reasons, it is best practice for the witness to be physically present when the signatory signs, rather than witnessing through, for example, a video conference call.
If in doubt…
There are relatively few legal requirements regarding witnessing. Ultimately it is for the benefit of the parties that witnessing is done well to minimise the risk of a dispute relating to the execution of the deed at a later date.
Witnessing is important because of the evidence it provides. If you are ever in doubt as to the best course of action when witnessing, always think of a solution that will provide the best possible evidence.
For more information on the requirements of deeds see our post Dastardly Deeds.
This blog post was written by Imogen Cox and Elliot Gibson. For further information, please contact:
Elliot Gibson, PSL assistant, Banking & Finance
T: 0161 836 7707