Is an electronic signature of a lease contract valid and enforceable?

If you are a real estate agent you want to close a property sale as quickly as possible so that the landlord collects the rent, the tenant can enjoy their house, and you can receive your fees. This implies the need to speed up the signature process. In this post we will talk about the use of the electronic signature in lease agreement, if it is valid or not, how it is used and what advantages it brings.

The processes of physical signature of a lease agreement are complicated because the parties have to move and meet, usually in a room to sign. This requires the contracts to be printed and checked to see that they correspond to the original and finally signed. The process takes time and resources (paper, ink, gas for travel usage for travel, etc.), but it can be simplified with the electronic signature.

The electronic signature of a lease agreement

Electronic signature as stated in eIDAS Regulation 910/2014 refers to data in electronic form, which is logically associated with other data and which is used by the signatory to sign.

In addition, the eIDAS Regulation defines three types of electronic signatures: simple, advanced, and qualified. For a flat, property etc lease agreement it is advisable to use an advanced electronic signature since there is a need to provide legal certainty to the parties so that:

To ensure that the signatory is unequivocally identified,

The signatories cannot deny that they have signed.

– The document is the original and has not been tampered.

Can property leases be signed with an electronic signature and take legal effect?

For an in-depth description of the validity of the electronic signature in a rental contract, we must analyse what the applicable law requires. Regarding the form of contracts, it is necessary to consider article 1278 of the Civil Code :

The contracts will be binding, whatever the form in which they have been concluded, provided that the essential conditions for their validity concur.

Therefore, a lease agreement can be written or verbal.

To complement this, article 37 of the Law of Urban Rentals establishes the following:

The parties may compel each other to enter into the lease in writing.

In this case, the identity of the contracting parties, the identification of the leased property, the agreed duration, the initial rent of the contract and the other clauses that the parties have freely agreed upon will be stated.

Therefore, should the parties so desire, the lease agreement will be concluded in writing.

On the other hand, the essential element for the existence of a contract is the consent that the parties freely give. The Spanish Civil Code, in its article 1262

lists the three essential elements for the validity of contracts: consent, object, and cause. (…)

The consent is manifested by the contest of the offer and the acceptance of the thing and the cause that must constitute the contract.

Therefore, for the validity of a contract, it is not necessary to have a handwritten signature, but to demonstrate the will of the contracting parties to the contract. For the advanced electronic signature, the validity derives from the fact that:

– is linked to the signatory in a unique way.

– is capable of identifying the signer.

– for the validity of a contract, it is not necessary to have a handwritten signature, but to demonstrate the will of the contracting parties to the contract.

-is an electronic signature that enables to identify the signatory and detect any subsequent change in the signed data.

What are the advantages of using the electronic signature in a lease agreement?

The electronic signature provides several benefits when signing lease agreements:

– Improves customer satisfaction, who can sign quickly and from anywhere.

– It simplifies the signature process since it implies non-physical presence of the signatories.

– It is possible to monitor the signature process, so that you can see who has signed and who has not.

It can be used in various types of lease contracts, for example, properties, house, industrial warehouses. At Click & Sign we have clients in the real estate sector to whom we provide electronic signature services for subsidized housing contracts, that need to be presented to official bodies such as the Instituto de la Vivienda de Madrid (IVIMA).

As a result of the foregoing the use of electronic signature in a lease contract is not only valid, but is also recommended promoting  the dynamism of the sector and the speed in the occupation of empty buildings

Leave a Comment