Electronic signature of bond documents during the lockdown and beyond
Author: Hopewell Sathege – Director
As a result of the lockdown, commercial banks and law firms have needed to look at alternative ways to obtain clients’ signatures. Long before the lockdown, certain banks accepted electronic signature of their documents. However, certain documents, such as affidavits and powers of attorney to be submitted to the Deeds Office for registration, are still required to be signed manually in terms of prevailing laws and regulations.
Post the lockdown, what we have always known as “normal” will most likely change. In particular, the Deeds Office will need to consider innovative ways to improve the registration process and it is just as well the Electronic Deeds Registration Systems Act (Act) was signed into law late last year. The aim of the Act is to put an electronic deeds registration system (e-DRS) in place, which will result in changes to the current land registration process.
The current land registration process is that documents must be printed, signed and then physically submitted to the Deeds Office for registration. Once registered, only original deeds serve as proof of ownership. However, once the e-DRS is implemented, all that will change.
The first change is that a deed will be regarded as a data message generated and stored electronically in the e-DRS. The other change is that a signature will be generated electronically in terms of the Electronic Communications and Transactions Act.
Deeds generated and registered electronically will be, for all purposes, deemed the only original and valid record of ownership. In terms of the Electronic Communications and Transactions Act, information is in its original form when the integrity of that information is capable of being displayed or produced to any person from when it is first generated in its final form.
While some banks accept electronic signature of their documents, they still enforce terms of their service level agreements stating that their documents must be signed in the presence of a conveyancer. As a concession during the lockdown, some banks have agreed to virtual meetings taking place with clients to facilitate the explanation of their documents. Thereafter, clients need to physically visit the attorneys’ offices to sign the documents in the presence of a conveyancer.
The reason some banks insist that clients must sign their documents manually may be due to the fact that Deeds Office documents must be signed manually, but this will change in the foreseeable future.
The Act was signed into law by the president but will only come into operation on a proclamation date to be determined. It could be that the COVID-19 pandemic will result in the proclamation date being determined a lot sooner than anticipated, which will then have to result in changes in how commercial banks operate their home loan divisions.
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