Can e-signatures on residential tenancy agreements be trusted?

Can e-signatures on residential tenancy agreements be trusted?

If you’re a landlord or a tenant, you might have been asked to sign up to a tenancy agreement electronically, without actually putting pen to paper. It’s convenient and quick for all concerned. But is it safe?

Landlords are often concerned that an electronic signature will not be as reliable as a “wet” signature in the eyes of the law, and that an electronically-signed tenancy agreement might not be a legally binding document.

E-signatures are used in many ways. We’ve all signed with a mini pen on a little screen for a parcel or shopping delivery. We’ve all ticked a box when buying things on-line, in order to agree to terms and conditions.

Often a “wet” signature is copied and pasted onto a hard-copy document.  None of these are real signatures, but their effect and function is the same.

Letting agents commonly use specialist digital signature services. Using the specialist service, a document can be sent to a recipient by secure email for reading and signing.

The system retains an audit trail of when the document was received, and when opened and read, what information was sent with it, and when it was signed and returned to the letting agent.

The idea is that if the digital signature is ever challenged in a court, the audit trail with the background information can be produced as extra evidence.

If your agent uses a digital signature service, you should ask for assurance that it complies with the provisions of the Electronic Communications Act 2000.

When it comes to tenancy agreements, agreements for leases in excess of three years are required to be executed as a deed, and the signatures must be witnessed.

There is no authority that this can be done electronically, and the same would apply to Guarantor agreements executed as deed.

Also, they must be registered at the Land Registry, and the Land Registry doesn’t currently accept e-signatures.    

For tenancy terms up to three years, the tenancy agreement doesn’t have to be executed as a deed. An e-signature can be used.

Ultimately, if the signature is challenged it will be up to a court to decide whether the alleged signing party had the intention to be bound by the document. The ability to produce the digital audit trail will be helpful as evidence.

It should also be remembered that there is no requirement for tenancy agreements of three years or less to be in writing.

So even if the signature is challenged, that’s not fatal to the existence of a tenancy agreement. An argument can be made that there was an oral tenancy, the terms of which are evidenced by the (unsigned) tenancy agreement.

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