Electronic signatures for real estate: benefits and uses

All sectors are benefiting from electronic signature and the real estate sector too. The real estate industry involves a large number of transactions that need to be signed. In this post, we have a look into the benefits of electronic signatures for real estate.

What kind of real estate documents can be digitally signed?

In the real estate industry, the electronic signature can be used for:

  • Sales or rental contracts. Two of the most frequent operations in the real estate market are selling (residential, commercial, industrial or land) or renting. These are contracts that must be signed by both parties so that there is evidence of their willingness to accept the agreements set forth in the contract.
  • Sale or lease offers. Both the signing of a rental and that of a sale are usually preceded by a negotiation process in which the parties send each other offers and counteroffers until they reach a final agreement on the main aspects of the contracts: rent, price, term, enforceability, warranties etc.
  • Deposit contract. Deposit contract is the document signed before the purchased sale contract where the parties agree to pay a deposit for the sale of the property.
  • Sales or rental orders. Real estate consultants and agencies must sign with their clients, sales and rental orders with the owners so that their fees are recognized in writing in each operation.
  • Internal company documentation. On a daily basis, real estate companies use a lot of internal documents where an electronic signature can be used such as contracts with provider of products sites to advertise properties for sale or rent, labour contracts, etc.

All the documents that we have described so far can be signed with an electronic signature thus making management of the real estate agency nimbler.

What are the benefits of the electronic signature in the real estate industry?

The benefits of the electronic signature in the real estate industry are as follows:

  • Legal validity. The electronic signature of documents related to real estate transactions is fully valid based on the following articles:
  • Article 25 of the eIDAS Regulation that establishes that the qualified electronic signature will have a legal effect equivalent to the handwritten signature.
  • Article 23 of Law 34/2002, of July 11, on services of the information society and electronic commerce, which establishes the following:
  • Contracts concluded electronically will produce all the effects provided by the legal system when consent and other requirements for its validity concur.
  • Electronic contracts shall be governed by the provisions of this Title, by the Civil and Commercial Codes and by the remaining civil or commercial regulations on contracts, especially the regulations for the protection of consumers and users and for the organization of commercial activity.
  • For the conclusion of contracts by electronic means to be valid, the prior agreement of the parties on the use of electronic means will not be necessary.
  • Provided that the Law requires that the contract or any information related to it be in writing, this requirement is deemed to be met if the contract or the information is provided in an electronic medium.
  • Environmental friendliness. Using electronic signature reduces the use of paper, ink, and other resources, making it most environmentally friendly.
  • The procedures for signing documents between buyer and seller, tenant and owner, and real estate agency and client, are much faster.
  • The electronic signature is safe in all respects and the identity of signatories is verified as well as the integrity of the signed document.

What type of signature can be used in real estate?

It is necessary to highlight that there are several tiers of electronic signature: simple electronic signature and the advanced one. Each type is used in different cases in real estate:

  • The simple electronic signature is often used in simplest documents such as a vacation request from an employee of a real estate agency, for example.
  • The advanced electronic signature provides more security, which is why it is usually used in contractual documents such as contracts of sale, lease, deposit contract, purchase options or sales or rental orders in favour of a real estate agency.

That being so, the electronic signature in the real estate industry in general and in the purchase and rental of housing in particular, may speed up the procedures that guarantee the operation and offer security and confidence to all the parties involved.

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