The responses to my first blog post regarding electronic signatures have generally confirmed what I was already thinking about the topic—many lawyers have been accepting electronic signatures and operating under the protections of UETA and SIGN without even knowing it. Given the positive feedback based on my last post, I’ve decided to do a second blog entry on the topic with more of an emphasis on practice pointers.
I’ve practiced commercial real estate law for almost 7 years now (6 ½ of those with one of the premiere real estate law firms in the Southeast), but I’ve never seen a big or small law firm utilize a program such as Docusign, Echosign, or Yozens for purposes of contract or closing documentation in the commercial real estate context. On the flip side, 4 months ago, my residential broker in Atlanta used an electronic signature program for document execution when we sold our house. It’s amazing to me that this technology is not more widely adopted in commercial real estate.
Here’s how Docusign (the most popular program) works. Attorneys or other real estate professionals e-mail the documents for execution to the designated parties. All parties can sign from wherever they may be located at the time—even from a portable device like an iphone. Once all parties have executed the contract or other documents, a notification and fully executed document gets circulated to the relevant parties–all automatically. The system is completely secure. In fact, it’s probably more secure than a standard signature because Docusign records the signer’s IP address and time stamps the signing activity. Geo-location information can also be included with the stamp. Docusign also offers access codes, knowledge-based ID checks, and biometric phone identification, if requested. Last time I checked, none of those options are available for the practitioner sending an original document to an unknown third party for execution; yet, for some reason the perception is that the original is more reliable. Even with a notary, I’m not sure it would be more secure.
I’m starting to see more reliance on pdf counterparts for purposes of documentation (think print, sign and pdf). This is a step in the right direction, even though baby steps. In fact, I just closed a multi-family apartment transaction last week in Atlanta, where the only original executed document was the Deed (required for recording purposes).
For those dealing with skeptical lawyers representing counterparties who want originals, I’ve found the following revised counterpart/facsimile boilerplate to be helpful. In fact, I’ve started inserting this provision into all of my documents.
Counterparts/Execution. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Signature pages may be executed via “wet” signature or electronic mark and the executed signature pages may be delivered using pdf or similar file type transmitted via electronic mail, cloud based server, e-signature technology or other similar electronic means.
Good luck working this language into your documents. I am going to keep fighting the fight and pushing for more sensible and modern documentation standards.