Electronic signatures for property transactions

What if a seller lives in a house in Cape Town that he wishes to sell. A potential buyer in France, looking for an investment property, sees the house advertised online. How do they go about signing the agreement of sale and all the transfer documents? Let’s explore whether electronic signatures can be used for property transactions in South Africa.

Electronic signatures are becoming increasingly common because they’re convenient and speed up the process of getting documents signed. Applications such as DocuSign enable secure e-signature transactions with multiple levels of authentication. But contrary to other sales transactions, the sale of immovable property still requires a written document signed by all parties personally to be valid and binding in terms of the Alienation of Land Act.

Another piece of legislation, the Electronic Communications and Transactions Act, deals with electronic signatures of documents and specifically excludes agreements of sale of immovable property. Therefore, the sales agreement must still be signed “in wet ink” by the buyer and seller or their agents. The buyer or his agent can sign the sales agreement in France, but the physical paper contract will have to be couriered back and forth.

Now to the next step, the transfer documents. The transfer of property is governed by the Deeds Registries Act, which requires that any transfer of land must be in writing and signed by all parties. Traditionally this has been interpreted as requiring a physical signature. But in recent years there has been a move to recognise electronic signatures as valid alternatives to wet ink signatures.

The Deeds Office still requires documents to be printed, signed, and physically submitted for registration. But once the Electronic Deeds Registration Systems Act is fully in effect, this process will be much easier. Presently, only one section is in force. The one that authorises the Chief Registrar of Deeds to develop, establish and maintain an electronic deeds registration system. Eventually, this system will replace the current manual preparation and lodgement process. And then the entire process will speed up dramatically.