Electronic signatures in real estate documents in South Africa

In general, an electronic signature can be used in most transactions unless:

  • the law prohibits the use of electronic signatures in a specific transaction; or
  • the law requires that an advanced electronic signature be used; or
  • parties to a transaction agree on another method of signature.

Real estate documents which electronic signatures can be used are:

  • lease agreements of immovable property which are not longer than 20 years (please see note under long-term leases under question 2 below);
  • mandates to sell or rent immovable property; and
  • a statement or document to be notarised, acknowledged, verified or made under oath, which requires a signature can be signed if the advanced electronic signature of the person authorised to perform those acts is attached to, incorporated in or logically associated with the electronic signature or data message.

In terms of the Electronic Communications and Transactions Act No 25 of 2002 (‘ECT Act’) the following real estate documents cannot use electronic signatures, including advanced electronic signatures:

  • agreements for the alienation of immovable property which must be in writing and signed in terms of the Alienation of Land Act No 68 of 1981;
  • long term lease agreements of immovable property which are longer than 20 years. Even though the ECT Act makes reference to a long-term lease agreement being a lease which is longer the 20 years, in South Africa it is generally understood that a long-term lease agreement is one which is longer than 10 years as provided for in the Formalities in respect of Leases of Land Act No 18 of 1969;
  • wills or codicils which must be in writing, signed and witnessed in terms of the Wills Act No 7 of 1953;
  • bills of exchange which must be in writing and signed in terms of the Bills of Exchange Act No 34 of 1964.

The ECT Act provides that where a signature of a person is required by law and such law doesn’t specify the type of signature required, this requirement in relation to a data message is met only if an advanced electronic signature is used.

The ECT Act goes on to state that an electronic signature is not without legal force and effect merely on the grounds that it is in electronic form. Where an electronic signature is required by the parties to an electronic transaction and the parties have not specified the type of electronic signature that is required, a signature will qualify as an electronic signature if:

  • a method is used to identify the signatory and to indicate the signatory’s approval of the information communicated; and
  • having regard to all the relevant circumstances at the time the method was used, the method was as reliable as was appropriate for the purposes for which the information was communicated.

The ECT Act makes provision for two types of electronic signatures: electronic signatures and advanced electronic signatures. Electronic signatures may be a scan of the signatory’s handwritten signature or be drawn using digital tools. Advanced electronic signatures are electronic signatures verified by an accredited authority. A higher level of credibility is granted to an advanced electronic signature.  Such an electronic signature is regarded as being a valid and properly applied signature, unless otherwise proved.

Caselaw has noted that courts in South Africa have always adopted a pragmatic approach to signatures rather than a formalistic approach. “The primary consideration is not whether the signature is literally pen on paper, but rather if the method of signature has fulfilled the function of authenticating the identity of the signatory”.

4. Are there any proposals to change the law relating to electronic signatures?

Yes. Specifically, in relation to real estate, the Electronic Deeds Registration Systems Act No 19 of 2019 was signed in September 2019 and is yet to be promulgated. Its aim is to provide for electronic deeds registration having regard to the legislation regulating electronic communication and transaction. Amongst other things, the electronic deeds registration process will make provision for electronic signature of deeds in line with the ECT Act.

5. Are there any other factors which prevent documents being entered into in electronic format?

Possibly, if documents need to be executed and authenticated for use outside of South Africa. In such an instance it is important to ensure that one complies with the laws or any other requirements relating to electronic formatting of documents by the person who will be receiving the document. The intention of the parties is also key in determining whether documents may be entered into in electronic format given the context and purpose of the document.

Portrait ofKagiso Mahlangu
Kagiso Mahlangu
Partner
Johannesburg