Electronic signatures, sale agreements & deeds registration

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At the beginning of October, the Electronic Deeds Registration Systems Act was promulgated. Once it becomes operative, it will ultimately allow for deeds to be submitted to the deeds office and to be signed by the conveyancer and Registrar electronically, thereby effecting registration of transfer.

Does this allow a sale agreement of land to be signed with a digital signature? No! The Electronic Communications and Transactions Act (ECTA) works as follows:
(i) It provides that it is generally in order to conclude agreements via electronic communications.
(ii) Should there be a statute in place requiring signature before a document will be considered legally valid, but the statute does not specify that the signature must be in writing, ECTA dictates that an advanced electronic signature (AES) may be used. (An AES is a special ‘electronic’ signature – a scanned image of a handwritten signature, or ‘digital’ signature – which, in certain instances, may replace the traditional pen and ink manner to sign documents. In order to use such a signature on a document, one first has to have the AES accredited with an accreditation authority in South Africa.)
(iii) If by law it is specifically stated that a written signature is required, an AES will not suffice (eg, the assignment of copyright in terms of the Copyright Act, which that Act requires to be in writing).
(iv) Certain agreements are specifically excluded from the above, importantly, agreements concluded in terms of the Alienation of Land Act.

Do not confuse this with the signing of formal documents relating to the transfer process following on the sale agreement. In 2018, the first ever property transfer transaction was registered in a deeds office in South Africa where the seller’s Power of Attorney to Pass Transfer was signed with an advanced electronic signature (AES).

This article was written and circulated by STBB in their THOUGHT OF THE WEEK e-newsletter dated 8 October 2019

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