Did You Know You Can Seal the Deal Electronically Now?

Ontario’s real estate agents are celebrating more than just Canada Day this week. As of July 1st, 2015, it is now legal to electronically sign (or e-sign) real estate contracts, such as the agreement of purchase and sale, deeds, and mortgages. That’s right - your tablet is now more than just a Netflix machine.

“For anyone buying or selling a home, signing and delivering documents can be a complex and time-consuming process,” says Madeleine Meilleur, Attorney General. “Modernizing real estate transactions will save Ontario families a lot of time and stress.”

It is already legal to e-sign real estate deals in other parts of Canada, including Quebec, New Brunswick, Manitoba, Newfoundland and Labrador, and Prince Edward Island. Not exactly Canada’s most popular housing markets, but their real estate transactions must be pretty efficient! In Ontario, there were 205,720 real estate transactions in 2014, and it’s on track to be around the same amount, if not more, this year. For over 330 years, it has been law in Ontario that all contracts of sale and lease needed to be written and signed with ink. This requirement under Ontario’s Statute of Frauds dates back to 1677, according to Bob Aaron of the Toronto Star.

“Homeowners, consumers, and local businesses in Ottawa and right across Ontario will benefit from the progress we are making today,” says Yasir Naqvi, MPP for Ottawa Centre. “I have been championing the modernization of real estate transactions since 2012 and I am pleased to see my private member's bill reflected in this new legislation. I know this update will create faster, more convenient ways to produce, manage and transmit legal documentation involved in a home or business purchase.”

Let’s take a look at the PROS and CONS of e-signing real estate deals:

PROS:

• More legible documents. When a real estate deal is being conducted, it’s sometimes necessary to print, scan, and download the contract numerous times, and it can make the contract difficult to read and track changes.
• Saves a lot of time. If the people involved in the real estate transaction are separated by distance, contracts are often mailed or emailed and printed and mailed back, or are hand delivered by agents.

• Some believe that fraud may become a larger issue. It is up to an agent to decide whether a contract is legitimate, and this is easier to do when they watch someone sign the contract in person. And in the undesirable case that a real estate transaction ends up in court, a handwritten signature is easily debated and tested. The legalization of e-signatures for real estate deals opens up a door to fraud to which all electronic-based systems are susceptible.
• Even though it is legal to e-sign real estate contracts, some banks and mortgage lenders may prefer you to sign in ink, and some may even require that a lawyer be present.

There are pros and cons to every technological advancement we make in society, but it’s the acceptance of new technology and new ways of streamlining dated processes that allow our economy and industries to thrive. It will definitely take some time to adjust and there will be mistakes made, but hopefully more real estate transactions become easier to complete starting this month!

Patricia Verge, President of the Ontario Real Estate Association puts it best: “The agreement of purchase and sale is one of the most important documents in a real estate transaction. The ability to sign it electronically will make the process of buying or selling more efficient. This is great news for realtors as well as consumers across the province.”