Can an agreement for the purchase and sale of immovable property be signed electronically?

It goes without saying that being able to sign documents electronically would make all our lives easier – especially for the signature of sale agreements, and bond documents. Not only would it save time and money, but it would speed up the transfer process.

Moreover, it would be extremely useful in unprecedented times like these where physical contact is prohibited.

Unfortunately, we are not quite there yet.

The Electronic Deeds Registration Act 2 of 2019 was signed into Law in October 2019. In terms of Section 2 of the Act which is currently the only operational Section, it allows for the Chief Registrar of Deeds to develop a system to enable the processing, preparation and lodgement of deeds and documents by conveyancers and the Registrar of Deeds over the internet.

The system has not yet been developed, and there is no set time frame for the Chief Registrar to develop this system. However, we are hopeful that it will be developed in the near future.

Electronic signing when it comes to sale agreements for the purchase and sale of immovable property is prohibited by the Electronic Communications and Transactions Act No. 25 of 2002 (ECT)
Section 4(3) of the ECT expressly provides that the provisions of the Act do not apply to the Alienation of Land Act 68 of 1981.

Contracts of the sale of immovable property are agreements that have to comply with the provisions of the Alienation of Land Act, accordingly, if an agreement for the sale of land is signed electronically it will not be enforceable.

You may however still negotiate the terms of your agreement electronically, i.e. via email provided that it is recorded in a written agreement signed by the purchaser and seller in ink after that.

While the Deeds Office is making the change to an electronic Deeds Registry system, we might have to wait a while for the law to change to allow for electronic signatures (with respect to sales of immovable property) which will inevitably be a tremendous milestone in the property industry.

For this and more on all things conveyancing and property law get in touch with us on karien@amchunter.co.za