Are E-Signatures Here to Stay?
The pandemic has changed the way we do business. Between home offices and ZOOM meetings, our daily engagements have felt a seismic shift. While some of these changes are temporary fixes, others could prove to be the new normal.
If you’ve bought or sold a property in the last year, you’ll recognize some of these changes right away. From virtual open houses and appointment-only viewings to online meetings with banks and lawyers, you might question if you’ll ever personally meet any of the people you’ve been doing business with.
One of the biggest changes in the management of real estate transactions is that you don’t always have to provide a “wet,” or physical, signature. Instead, in a lot of cases, you can provide an e-signature to act as your legally binding agreement.
The Change in Business
While e-signatures have been used in real estate transactions for years, since the start of the pandemic, their use has increased exponentially. “Prior to COVID, I would guess that I was using e-signatures 60-70% of the time” notes Ronald Francis, a real estate broker with 22 years of residential experience, “now it would be at least 90%, maybe 95%.”
A spokesperson from the Royal Bank of Canada (RBC), observes that the introduction of e-signatures to mortgage documents had been in the works, but was pushed to implementation with the pandemic. “At the onset of the pandemic,” he states, “we rapidly shifted our priorities and launched an e-signature solution that could be leveraged by our mortgage specialists. The use of e-signatures has accelerated steadily ever since.”
Mark Weisleder, a senior partner and notary public at Real Estate Lawyers.ca LLP, points out that while the pandemic resulted in a rapid shift in how business was handled, the change was almost inevitable. “Already, a year or two before the pandemic, things were moving in that [the e-signature] direction,” he comments.
To see the real estate industry’s confidence in e-signatures, look no further than Canadian Real Estate Association (CREA)’s partnering with DocuSign, an electronic signature management program. While this partnership began before the pandemic, it demonstrates how the industry was prepared for the shift.
Adopting e-signatures into real estate transactions has had numerous advantages for the industry. Mark Weisleder observes, “I think [the government] did realize that the electronic signature in many ways is more secure, and there’s a record of it, even more so than a handwritten signature”. With the digital footprint they leave behind, it’s much easier for e-signatures to be authenticated, and easier for witnesses to be verified.
During the pandemic, e-signatures have also allowed real estate agents, mortgage brokers, and lawyers to stay at the forefront of health and safety. RBC notes “to help keep our clients and employees safe, we encourage our mortgage specialists to recommend the use of e-signatures, eliminating the need for in-person interactions as much as possible. Currently, the majority of our mortgage documents are signed using our e-signature capability.”
The use of e-signatures has made the process of buying and selling property much smoother. In the past, individuals would have had to meet with a number of individuals to sign various formal documents, driving from meeting to meeting as they put ink to a seemingly endless stream of papers. “[The] advantages are obvious,” says Ronald Francis, “stay in [your] home office, send documents for signature and receive them in a matter of minutes.”
It’s important to note that not all provinces have fully incorporated the practice. Jeff Kahane of Alberta’s Kahane Law Office comments that “[e-signatures are] not permitted in real estate documents that need registration at land titles. We need video signed documents to be sent back to us (originals) for land titles submission. In Ontario and BC things are different and contracts have been signed electronically for a while […] here a transfer needs wet ink.”
Ephraim Fung of British Columbia’s Alexander Holburn Beaudin + Lang LLP in B.C. similarly notes that “section 2(4) of the Electronic Transactions Act (British Columbia) provides that documents registered in the B.C. Land Title Office to create or transfer interests in land cannot be signed with e-signatures. These documents need to be signed with wet ink and witnessed by a lawyer or notary public.”
That’s not to say that a change to the industry isn’t coming in the near future. RBC notes “the recent shift may also expedite some regulatory changes regarding e-signatures on registration documents as some provinces still require a wet signature.”
Mark Weisleder echoes the sentiment that present circumstances have pushed technological adaptation forward in a way that might not otherwise have been possible. “This is where I’ve seen the pandemic actually move things along in a very positive way, which might have taken, frankly, years,” he observes.
With how easy e-signatures have made handling transactions, it’s not surprising that Ronald Francis and others feel that “e-signatures are here to stay”. With individuals able to sign documents on their own time and with minimal disruption, the adoption of the technology will continue once the pandemic is behind us.
The efficiency of e-signatures is not lost on Mark Weisleder. “The use of e-signatures has also enabled our law firm to complete an entire real estate closing without ever seeing a buyer or seller, and making sure everything is completely safe,” he notes.
Not only do e-signatures allow for a more streamlined flow of business, but they also help to reduce the possibility of errors in document signing. By clearly directing consumers to what lines of a document need signatures, there’s less chance of missed or incorrectly placed signatures. This allows transactions to be completed faster and with less confusion.
Beyond the benefits to consumers, RBC notes that e-signatures have additional advantages. “There is also an environmental benefit since we’re able to significantly reduce the amount of paper required to complete an application and eliminate the greenhouse gasses associated with travel relating to signatures.”
Ephraim Fung observes that in B.C., “In response to challenges presented by the COVID-19 pandemic, the B.C. courts, and Land Title Survey Authority have released practice directives and policies that make remote/video witnessing of land title documents possible.”
This evolution is a positive step forward, while still maintaining strict security measures. Fung continues, “these policies require parties to B.C. real estate transactions to go through stringent checks and balances to ensure their identities are properly verified. Additionally, practitioners must submit sworn affidavit evidence concurrently with any remotely witnessed land title document for review by the Land Title Survey Authority, prior to the land title documents being accepted for registration.”
E-Signing on the Dotted Line
While the pandemic has presented the industry with many challenges, it has also driven real change. “We’re very pleased with the way that we’ve been able to use technology, as lawyers… it has helped to keep the industry going during difficult times,” says Mark Weisleder.
The relative ease with which the real estate industry has integrated e-signatures shows a significant shift in thinking. While the pandemic may have forced the industry to integrate the technology sooner than anticipated, it’s a welcome change that won’t be going away any time soon.
Originally posted on the Dominion Lending Centres ‘Our House’ blog. The original post can be found here.