10 Things You Should Know About Digital Signing Of Real Estate Agreements in South Africa

Real estate digital control

What Is The Status Of Digital Signatures In South Africa?

So here is the low down on digital sale agreements for immovable property in South Africa.

10 things you need to know:

  1. The global trend towards digitisation is growing exponentially and has been accelerated even more by the Covid-19 pandemic. Lockdowns have made it awkward for agents to meet clients face-to-face to get physical signatures and the guidelines on staying safe only serve to exacerbate this.
  2. The plethora of digital tools that are used today raise the obvious question as to what tools are available to obviate the need to still obtain physical signatures.
  3. The legislation requiring physical signatures is still in existence and the law makes no provision for any alternatives. This law came into existences in 1902 when computers were not available in South Africa and so there was no thought given to any other options. Emails, the computer and the internet were unthinkable back then.
  4. In 2002 the Electronic Communications and Transactions (ECT) Act, no. 25 was launched with provision of electronic signatures for commercial contracts but not for immovable property or long-term leases. In fact, this Act reinforces the requirement contained in the Alienation of Land Act for the Deed of Alienation to be contained in a document and physically signed by all the parties. This clearly excludes communication channels like email, WhatsApp, texts and the like.
  5. When parties are in other countries an additional requirement is added to this. It is known as Rule 63, which requires the signatures of all documents signed outside of the country to be witnessed and authenticated by a South African Consular Official at a South African Embassy! Once again, this requires a face-to-face meeting. One can easily imagine a host of situations where this can cause massive delays and inconvenience further exacerbated by the pandemic.
  6. Even with the requirement to have physical signatures there have been countless examples of forged signatures, many of which have escaped the Deeds Office notice.
  7. Digital fraud, Cyber Fraud, electronic interceptions and digital impersonations are just some of the challenges that need to be overcome before a safe, fraud-free methodology can be created to allow for the substitution of physical signatures.
  8. Secure software applications are constantly being developed and have been in our midst in the banking space for some time already but there are still several loopholes that savvy legal and digital minds argue have not been overcome.
  9. The primary obstruction to opening the door to electronic signatures is the need to have unequivocal proof that the person who provided the digital signature was indeed the person who did so and can be shown to be so, retrospectively. This is a difficult nut to crack.
  10. Another hurdle is to be able to certify that the signatures on each page of the document were legitimately placed there and not extracting them from elsewhere through a “cut and paste” methodology.

Conclusion

There is currently no alternative legally acceptable method for the signing of immovable property and long-term leases in South African law, other than physical signatures on the document by all the parties.

Digital signature software does exist but no-one has yet cracked the solution to point 9 above. Examples of these software offerings include DocuSign, PandaDoc and AdobeSign.

The current laws pertaining to the alienation of land were written a long time ago and there is clearly a demand to look for alternatives that are safe and fraud free particularly during the Covid-19 pandemic. This is especially applicable to Rule 63!

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