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Virtual data rooms are becoming more common in conveyancing transactions, particularly for new developments and auctions. They can be a useful medium for making title available for both registered and unregistered title.

However, a purchaser’s solicitor cannot be compelled to use a data room, and it should be clearly stated from the outset that, at any stage, a purchaser’s solicitor is entitled to receive hard copies of the title.

If the respective solicitors do agree to use a data room, a number of factors must be considered:

• The data room should be well organised, with a clear and accurate index of the documents corresponding to clearly numbered and labelled files.
• The integrity of the documents must be maintained, with all documents being easily accessible and clearly legible.
• Documents should be date stamped and, when new documents are added, they should be easily identifiable as new documents and the index updated. Where access to the data room is restricted to authorised parties, all parties with access should be notified of all new documents uploaded or any changes to the information in the data room.
• Documents should be in a format capable of being downloaded, saved and printed.
• Maps should be coloured.
• Hard copies must be furnished on closing with a solicitor’s certificate confirming that the hard copies of the title documents exactly mirror the documentation filed in the data room.

Solicitors should also consider privacy and security aspects. A virtual data room can allow a vendor’s solicitor to track the activity of a purchaser’s solicitor and hence, potentially, be aware of when, how often and for what length of time title investigation is being done. This may have an impact if a dispute occurs between the vendor and purchaser and there is subsequent litigation that raises questions about the extent of due diligence carried out by the purchaser’s solicitor.

A generic ‘for your information’ section that is available to all the potential purchaser’s solicitors may be a helpful feature. However, a question-and-answer facility, whereby queries raised by an interested party are uploaded to the data room with the vendor’s response, is not recommended, as purchasers’ solicitors may not wish to be put on notice of other solicitors’ questions and the respective answers.

It is recognised that, in exceptional circumstances – such as a loan portfolio sale involving a large number of properties and volume of documents – it may be impractical to provide hard copies at the outset. In those circumstances, the vendor’s solicitor and purchaser’s solicitor may, for their mutual benefit, opt solely to use a virtual data room.