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State-by-State Round Up: Electronic Signatures, January 2017

The current waters are still a little murky in relation to the use of electronic signatures. According to white papers released by CoreLogic on the use of DocuSign, an electronic signatures software product, electronic signatures are legal in most Australian Jurisdictions.

Rundl, powered by progressive law firm LawLab, already have clients transacting with electronic signatures across many of the Australian Jurisdictions.

Others, however, including many of the REI Form products have been more cautious in the implementation of electronic signatures as technology and best practice advice moves further into alignment.

The theme of the round up is that the economies and efficiencies of electronic signing are broadly winning the day with most moving towards electronic signing rather than away from it.

The development of the electronic signing practice for real estate agents will continue to evolve as regulators, peak bodies, tech companies, media and consumers become more adoptive and adaptive to the process. In the meantime, we can use the capabilities that are available and becoming available, while our industry bodies can encourage Government to embrace the practice and everyone can spectate the development of the law as test cases assist us to define the future of electronic signing.


Commonwealth of Australia

In Principle:

The Electronic Transactions Act 1999 (Cth) is Australia’s framework for a digital economy. It was designed to create technological neutrality – meaning that transactions conducted using wet ink should be considered equivocal at law to those created electronically.

In Practice:

It is important to note that this Act only relates to laws of the Commonwealth, as States have jurisdiction over their own property. It is also important to note that the law does not override the legal obligations created by other Commonwealth legislation – so we end up with the peculiar anomaly of Corporations in property contracts, being subject to Commonwealth Corporations Law which can disadvantage a company signing electronically.

Without getting too technical, there is a provision in the Corporations Act (Cth) 2001, Section 127(1), that allows for Company Office holders to enter into contracts without it being under the common seal of the company, and if they do so, Section 129 takes away many protections for the company, such as against fraud or mistake, making it somewhat unattractive for a company to adopt electronic signatures for major transactions.

Thanks Australia for the unwanted complexity.

The Status Quo from those in the know:

Greg Troughton of REISA, which has been at the forefront of the drive for electronic signatures says, “I know that REIA is working tirelessly to get this lifted as a priority to be fixed – the lovely little idiosyncrasies of our beloved Federation!”


Queensland

In Principle:

REIQ CEO Antonia Mercorella says, “The Electronic Transactions Act is designed to facilitate electronic transactions in Queensland. This includes allowing contracts to be completed by digital signature subject to the prior agreement [of the parties].”

In Practice:

The integration of Realworks contract forms and Docusign is pending, but an exciting development.

Even once electronic signing in underway, Qld regulatory bodies and State Departments may still require written documents for their processes and legislation does not allow for all of the documents in a sale to be signed electronically.

Solicitors will have to print the electronically signed contract to submit to government for transfer of title.

Sales Documents that still require wet signing, according to LawLab:

  • Transfer documents
  • Stamp Duty Concession Application
  • First Home Owner Grant Forms

The Status Quo from those in the know:

The REIQ has been working closely with the relevant government and statutory bodies to overcome their objections to accepting digital signatures. This work is ongoing and we are reaching a positive outcome.

The REIQ is now in the process of integrating DocuSign into our real estate forms platform, RealWorks.  This will enable real estate practitioners to streamline the contract process by emailing documents and seeking digital signatures eliminating the need for traditional signing processes.

When real estate practitioners are using digital signatures it can be a very complex issue due to the issues associated with verification of the signature in the event of a dispute. We advise all real estate professionals to use an established, credible digital signature provider, such as DocuSign,” REIQ CEO Antonia Mercorella.


New South Wales

In Principle:

Electronic Transactions Act 2000 (NSW) enables any transaction that can be signed in paper, can be signed electronically.

In Practice:

According to CoreLogic’s White Paper on electronic signing in NSW, Parties do not have to expressly agree to using electronic signatures prior to signing, as consent is not required to be in written form, it can be inferred from the fact that the party has signed their name electronically. It is also inferred that if one party signs electronically, then they consent to the other party using the same method.

“We will be shortly offering Docusign to our members.” – Tim McKibbin, CEO, REINSW

The LPI still requires a hard copy of the agreement.

Some NSW agencies are using and have implemented digital signatures for contracts of sale, including BresicWhitney and PurpleBricks.

Sales Documents that still require wet signing, according to LawLab:

  • Stamp duty concession/grant forms
  • Transfer
  • Purchaser Declaration (OSR Form 76)

The Status Quo from those in the know:

WE are going to see undoubtedly a growth in this area because of the efficiencies and economies of being able to do business, particularly in transactions where parties are separated by significant distance.” – Tim McKibbin, CEO REINSW


Victoria

In Principle:

Electronic Transactions Act 2000 (Vic) applies to contracts of sale, however, like most other states, there are additional sales documents that are still required to be physically signed.

In Practice:

The REIV has implemented digital signing into its forms product, where both parties are face-to-face. This means that if a Landlord and PM are in a meeting, both can sign a contract on an iPad, generate a PDF and send this to both parties by email. As for the capability which allows parties to contract at a distance, on a platform such as DocuSign, the integration is pending: According to David Hall, Online Operations Manager, REIV: “We [The REIV] are in the process of evaluation some off-the-shelf options for adding digital signatures”. Watch this space.

Even when that integration takes place, electronic signing remains piecemeal in that some documents still must be either wet signed by legislation, or the regulatory bodies have manner and form requirements which apply to those documents. An example would be the RBTA’s online Bond Processing platform, which means that Bond Refund Forms would not be eligible for electronic signature.

Sales Documents that still require wet signing, according to LawLab:

  • Stamp duty concession/grant forms
  • Transfer
  • Purchaser Statement (SRO Form 62)
  • Goods Statement/Stat Dec (SRO Forms 1/2)

The Status Quo from those in the know:

Comments from the REIV:

“We’re seeing increasing interest from the various stakeholders in using electronic signatures generally, and in particular using digital signatures between people who are not physically at the same location.

Estate Agents are aware that digital signing can be a quick and easy way to have the relevant paperwork completed by Landlords, Vendors, Tenants and Purchasers when they are dealing in a property transaction.

There is also increasing trust in the systems in the marketplace that facilitates digital signatures. They have become more robust and secure as time has progressed.

The REIV recognises that the ease of electronic property transactions is key driver moving forward. We believe as the benefits of digital signatures are becoming more obvious it will mean that they will become commonplace in real estate practice.”


Tasmania

In Principle:

Electronic Transactions Act 2000 (Tas) is the relevant piece of legislation for electronic signatures in Tasmania.

In Practice:

According to CoreLogic’s White Paper on electronic signing in Tasmania, DocuSign can be used in relation to a contract of sale if the parties consent to its use. Presumably, this extends to platforms other than Docusign.

Mark Berry, CEO of REIT, described the implementation of electronic signatures as being a “living process” (full comment from Mark, below).  The sign on screen of the REI Forms Live Tas product allows for face-to-face signing, where legislation allows and presumably where there are no objections from the regulatory bodies accepting the forms.

Integration of electronic signing where parties are transacting over a distance is in development and anticipation for integration into the REI forms product is said to be coming soon.

Transfer of title documents still need to be signed with wet ink

Sales Documents that still require wet signing, according to LawLab:

  • Transfer
  • First Home Grant Forms

The Status Quo from those in the know:

“The Real Estate Institute of Tasmania (REIT) implemented electronic face to face signature on all property management forms just on twelve months ago.

Through REI Forms Live TAS, REIT members can digitally sign their documents quickly,  efficiently and legally through this platform.  This includes Management Authorities, Lease Agreements, Inspections and Letters to both tenant and property owner.

Before the REIT released the electronic signing feature the REIT was provided legal advice from our company lawyers as to the legal compliance to ensure maximum protection for our members.

The REIT will shortly be releasing other feature such as digital signatures at a distance through a third party and landlord insurance options.

REI Forms Live TAS continues to be developed and grow.  This process will never end, we look at our Electronic Forms offering as a living platform, and as such it will continue to grow and improve as the needs of our members change.  REI Forms Live TAS is without a doubt the most significant technological step the REIT has taken for some time and this continues to be rapidly embraced by REIT members.” – Mark Berry, CEO REIT


Northern Territory

In Principle:

Electronic Transactions Act 2000 (NT) enables electronic signing where it is not otherwise prohibited or where there are prescribed manner and form requirements.

In Practice:

The REIT is currently in the process of introducing Docusign integration. Currently the Forms Live platform allows for face to face signing of most property management documents, however this does not extend to documents that require specific forms.

The CoreLogic Whitepaper for the Northern Territory uses the example of a notice of termination or notice of breach as examples of forms that are not suitable for electronic signing due to their format requirements. These forms include a notice to terminate a contract of sale or to terminate a lease as examples of forms where electronic signing cannot be used.

Sales Documents that still require wet signing, according to LawLab:

  • Transfer
  • First Home Grant Forms
  • Stamp duty concession forms

The Status Quo from those in the know:

“Our aim is to have a paperless system, where we can.” – Quentin Kilian, CEO REINT


Australian Capital Territory:

In Principle:

The Electronic Transactions Act 2000 (the Act) currently provides for the use of electronic communication and electronic signatures where the ACT law requires information to be in writing, and where legislation doesn’t specifically exclude the practice.

In Practice:

The situation is the ACT is more divergent than in other states.

REIACT does not integrate with DocuSign and has expressed a cautious approach to the use of electronic signatures, due to what it believes are issues with validity and reliability in the light of a 2014 case where an alleged case of fraud involving a property sale was enabled by the use of an electronic signature and then later referred to the AFP.

In contrast, the CoreLogic’s White Paper on electronic signing in The ACT takes a progressive approach and sees the jurisdiction as largely parallel to other Australian Jurisdictions.

So the jury is out, essentially, in the ACT, though as the peak body the REIACT can give further advice and practice direction to members

Sales Documents that still require wet signing, according to LawLab:

  • Transfer
  • First Home Grant Forms
  • Stamp duty concession forms

The Status Quo from those in the know:

Michelle Tynan, Manager REIACT, in discussing the issue of electronic signatures has highlighted that although the transactions may comply with the Electronic Communications Act,  there are particular risks for the industry in relation to real estate transactions.


South Australia

In Principle:

The Electronic Transactions Act 2000 (SA) has been largely embraced by the industry in South Australia.

In Practice:

REISA has full electronic signature integration with its forms and has been at the forefront of all of electronic signing in Australia.

According to Greg Troughton, CEO REISA, “REISA has had a few thousand transactions with the REI Forms Live and DocuSign integration already.  As is typical, we ask our members to be mindful that this approach at least in SA is new and they should proactively and conscientiously consider what this new technology process means for their business.  Feedback has been beyond sensational – whilst it is still early days, REISA expects even further growth of remote signing throughout 2017.”

It is worth noting that the end to end conveyance of property can be made electronically, without the need for separate paper, or wet-ink, transfer documents, according to LawLab, save for government revenue and grant applications.

Sales Documents that still require wet signing, according to LawLab:

  • First Home Grant Forms
  • Stamp duty concession forms

The Status Quo from those in the know:

“…the Commonwealth Electronic Transactions Act still does NOT CLEARLY AND UNEQUIVOCALLY (at least to many lawyers at least) deal with Corporations executing electronically.  I know that REIA is working tirelessly to get this lifted as a priority to be fixed – the lovely little idiosyncrasies of our beloved Federation! Nonetheless, we have used the simple requirements of common law execution (if legislation does not help you introduce efficiencies then we seek it out elsewhere) – so if a company entity involved and it being a creature of the Commonwealth, we still insist on a ‘trusted witness’ process to best mimic the wet ink face to face process.” – Greg Troughton, CEO REISA.


Western Australia

In Principle:

Electronic Transactions Act 2003(WA) enables WA to deal with electronic signing for many real estate transactions.

In Practice:

In contrast, the CoreLogic’s White Paper on electronic signing in the WA, most real estate transactions are possible by electronic signature.

REIWA have advised that the sale of land is not eligible for electronic signing, see comment from REIWA CEO, Neville Pozzi, below.

The integration of forms with a product for electronic signatures is a priority for the REIWA.

Transfer of title documents must still be wet signed.

Sales Documents that still require wet signing, according to LawLab:

  • First Home Grant Forms
  • Stamp duty concession forms
  • Transfer

The Status Quo from those in the know:

REIWA CEO, Neville Pozzi, says: “REIWA is working towards formatting all of its forms (with the exception of the contract for the sale of land) for electronic signatures and making those forms available through its REI Forms Live platform. It is proposed that the forms will be easily integrated with products such Docusign.”


Where to find out more:

We will continue to monitor the evolution of electronic signatures as a fundamental link in the chain of disruption for our industry.

This information is of a general nature and does not constitute legal advice nor is it intended to make comment as to best practice. It is open to you to obtain specific legal advice or to seek out best practice direction from the peak industry body in your state, being the respective Real Estate Institutes.

In the meantime, you can seek out CoreLogic’s White Paper and FAQ for each state at www.corelogic.com.au/docusign

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