Can you transfer a beneficial interest in property via WhatsApp?
In the recent High Court case of Maxine Reid-Roberts & Brian Burke (as joint trustees in bankruptcy of Audun Mar Gudmundsson) v. Hsiao Mei-Lin & Audun Mar Gudmundsson, the court found that a WhatsApp message did not constitute a transfer of a beneficial interest in a property. As part of divorce proceedings, a WhatsApp message was exchanged stating, ‘I suggest the responsibility of taking care of the kids goes to u 100%, then I can sign over my share of southcote road to u’.
The court held that the message was part of informal negotiations within divorce proceedings, without an intent to be legally binding and used language indicating a future transaction.
The court also looked at whether, regardless of intent, a WhatsApp exchange could form a legally binding contract for the purposes of s.53(1) Law of Property Act 1925, which requires the transfer of a beneficial interest in land to be in writing and signed by the seller. The court concluded that the automatic display of a sender’s name in a WhatsApp header could not amount to a deliberate signature by the sender, and did not satisfy the legal requirements for a valid transfer.
What constitutes legally binding communication?
The court has confirmed the position taken in previous cases: that a platform-generated header that appears incidentally does not suffice, similarly to the automatic appearance of an email address at the start of an email.
More importantly, it confirmed that there are instances in which a WhatsApp message may constitute a legally binding contract. Had there been no conditionality to the message, and had the sender signed their name (i.e. ‘I transfer my share of southcote road to you, Sender’) the outcome may have been very different.
This case is a helpful reminder of the law around creation of contracts via email. Signing off an email with your name, or sending an email knowing an automatic signature will be added, can both construe a legally binding contract.
What steps should you take when transferring an interest in land?
Companies and individuals should be wary of promising anything in open correspondence - even informal messaging apps such as WhatsApp.
For those who intentionally want to transfer an interest in land, we suggest getting in touch so that we can help you to do this properly and ensure it is registered correctly at HM Land Registry.
Looking to prepare and need a helping hand?
Get in touch and let our Real Estate specialists take it from here.
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Please be advised that this is an update which we think may be of general interest to our wider client base. The insights are not intended to be exhaustive or targeted at specific sectors as such, and whilst we naturally take every care in putting our articles together, they should not be considered a substitute for obtaining proper legal advice on key issues which your business may face.