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  • Technology

    *Digital signatures in the property industry

    As many of you know, Nick and I are very keen to encourage landlords adopt digital technology to create efficiency in their day to day world.

    In an age where speed is key, the use of electronic signatures is gaining in popularity as it represents a fast and practical alternative to manuscript signatures and circulating documents for signature in the post.

    A digital signature is an electronic signature that can be used to authenticate the identity of the signer of a document.

    Digital signatures can be used in property for:

    >Any form of contract
    >AST agreements
    >References
    >Inventories

    The obvious question is are digital signatures legal and will they stand up in a court of law?

    The answer is a definite "yes". Electronic signatures are not only admissible as evidence, but thanks to digital time stamping and other protocols, almost any electronic form of signature actually has higher authentication criteria than normal handwritten signatures.

    In addition to common law recognition of electronic signatures, the UK Electronic Communication Act of 2000 and the Electronic Signatures Regulations 2002 makes it clear that legally required “writings” can be signed electronically and retain their legal status.

    Section 7 of the Electronic Communications Act states that in any legal proceedings, an electronic signature incorporated into or logically associated with a particular electronic communication shall be admissible into evidence in relation to questions as to the authenticity or integrity of the communication or data.

    Digital signatures allow you to get a document signed in a matter of minutes and at far cheaper cost. They are particularly useful for getting signatures if you are located a long way geographically from the person you need to sign the document(s).

    We are pleased to announce that Signable have just joined Property Tribes as a sponsor. Their short video explains the benefits of using digital signatures:







    * Property Tribes is a free to use community resource. In order to keep it free for the members, we need the support of sponsors. In the interests of transparency, this post has a commercial element and refers specifically to Signable, a new sponsor of Property Tribes who now "power" the discussions of our "Digital Tribe". We welcome Signable as a sponsor and thank them for their support of the Property Tribes community.

    [Image: house.png]Related content:

    Are you going digital in your property business?
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    We use an alternate service daily! For the mortgage brokers to cut time and allow prompt interaction with distant customers. It enables a northern company complete most of its business "down south".

    I will be checking out Sign-able, see how it compares. Not seen this one before.
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    THIS PROPERTY TRIBES ACCOUNT IS NO LONGER USED.
    DO NOT SEND PRIVATE MESSAGES.

    --- MORE INFO HERE ---

    YOU CAN REACH ME AT BESPOKE FINANCE or MY TEAM AT 08009202001


    I use 'Verisign' in my other business.

    Still prefer the face to face approach with tenants so will stick with paper ASTs
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    There are some big issues.

    A digital signature system confirms that the “sign it” button was pressed by someone on a system that was logged in. It does not
    • Confirm the ID of the person that is has been given the login details. (Someone may have hacked into my email system.)
    • Checks to see if someone else pressed the “sign it” button, while the correct person is not looking. (Think of the number of children that buy items on their parents iTune account!)

    Will the system still be about in 20 years time when you have to prove who signed the document?

    And most importantly.

    Will the tenant’s friend (that thinks they are an expert in the law) lead the tenant to believe that lack of a paper document may get the tenant off the hook?

    In a lot of way with an important set of terms, I like to see someone sign the short document while being photographed, after they have initialled each important term in the document.

    That way the person is more likely to remember what they have agreed to and believe that it is important to keep to it.

    If you every have to check if someone will stand up in court, you have already failed.
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    Thanks for your concerns Ian.

    A number of high profile lettings agents are already using digital signatures and it has been tested in court.
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    Has Ian's point about someone could have hacked the email specifically been tested in court?

    Would be good to know the solution for that defence specifically as that's the most likely objection "I never signed a contract your honour"
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    A would be a lot happy with an agent using a digital signature for the landlord to confirm that landlord agreeing to each new AST. (A recorded phone call to the landlord thanking them for signing the document, is likely to get over most issues, as it confirm that it is them that did so. The computer confirms all the details.)

    In real life the tenants tend to be in the some location as the agent, so I see little benefit.

    The issue is, I don’t care if they will stand up in court. - I care about having a process that is most likely to lead to the tenant giving me an easy life. It is more about making the tenant believe that they have “brought in” to the agreement, then about proving that they signed a 20 page document that they do not really understand.
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    Ian, that depends.

    For instance; its like a PIN on your debit card. If someone uses your debit card with your PIN the bank thinks you had something to do with it. The same goes with these forms that can be sent to a users email address AND can be password protected that you can give over the phone.

    The user would also have to prove his email was hacked, this can be done easily via IP logs and that the IP address used to sign the tenancy was not his at that time. AND that somehow someone got his PIN.

    If used properly, online signatures can be very secure. Perhaps more so that a scribble on a peace of paper a tenant can deny they ever made.
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    THIS PROPERTY TRIBES ACCOUNT IS NO LONGER USED.
    DO NOT SEND PRIVATE MESSAGES.

    --- MORE INFO HERE ---

    YOU CAN REACH ME AT BESPOKE FINANCE or MY TEAM AT 08009202001

    Adam,

    I totally agree it can be very secure.

    The issue is does it get as much “buy in” as getting the tenant to initialize each important term while being witnessed by someone they care about?

    A tenant just has to say “I don’t understand these computer things, I just pressed the buttons I was told to…” to feel that they don’t have to keep to any terms they don’t like.

    Now for one of your mortgage clients agreeing to you doing a credit check or a mortgage application it is a very good option.
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    Some great points brought up regarding the legality and security of electronic signatures.
    Firstly, before I answer them, there is a massive difference between a 'digital signature' and an 'electronic signature'. We use both however ultimately the signer is signing with an 'electronic signature'. By definition an electronic signature is just an electronic form of a signature.

    Adam, glad to see you are using an electronic signature service. If you have any questions about what we offer please just shout!

    Ian, I completely understand your concerns about electronic signatures. On the face of it they do seem 'insecure' however there is a huge misconception about how 'secure' paper based or 'wet' signatures are. Just to answer your specific points:
    • Someone may have hacked into your email account however that is then fraud, exactly the same way as if someone forged your name as a wet signature
    • Again, this is fraud however as Adam states you are solely responsible for any signature that is placed

    The system doesn't actually need to be around in 20 years to verify the signature. We provide all the information up front and automatically with every single signature in the form of a certificate. This certificate contains IP addresses, unique fingerprints, browser and computer information as well as a full audit log on where the document has been.

    Contract law (not just electronic contract law) is statutory which means that its evidence based. Every contract dispute is decided by a judge (potentially) and they use the evidence they have to see if the contract was signed correctly. If a wet signature is used, you have a lot less evidence than if an electronic signature is used. If I was posting you a contract to sign via a wet signature, how do I know that you signed it? With electronic we can at least track to an email address, IP address and browser/computer information. Of course some of our customers also ask for unique information like National Insurance number and/or Passport numbers which help build up the evidence.

    Electronic signatures were made legal in the UK and EU in 2000 with the Electronic Communications Act. PIN's are a great example of an electronic signature, replacing the wet signature we used to sign on receipts.

    Regarding your point about ignorance, pleading ignorance isn't a justified defence, not only with electronic but with wet signatures as well. Saying 'I didn't read the contract' isn't a valid defence in any contract. The onus is on the signer to understand what they are signing.

    Please get in contact with me directly if anyone has any other questions or queries about that or also feel free to reply to this thread.

    Even though electronic signatures have been legal for over 14 years, the culture of the UK market is still only slowly coming round to the idea. Electronic banking helped drive this forward by making people feel safe when dealing with their money, a task that many people thought wouldn't be done online as it is too 'personal'.
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    We've just recorded this interview with Olly from Signable to address some of the points raised in this thread about digital signatures:







    I know Olly is more than happy to answer any questions anyone has.
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