E-Signatures and sale of immovable property agreements

16th Jun 2020

The US Attorney-General Robert F Kennedy said during the Attorney- Day of Affirmation Address on 6 June 1966 at the University of Cape Town “we live in interesting of times

 

South Africa has entered level 3 of lock-down, making it easier for Estate Agents to see clients face to face, in order to have an offer to purchase sale of immovable property agreements signed.

 

It is however remarkable how innovative Estate Agents became during the lock-down level 4, especially looking at virtual tours of the property. We have definitely entered the digital era.

 

A question that arises is whether it is valid to sign an agreement to purchase immovable property electronically. A vehicle can be bought merely by signing some online documentation electronically, which is quick and easy to complete, why not immovable property?

 

Physical signatures are still required for specific agreements, despite the Electronic Communications and Transactions Act 25 of 2002 (ECTA). Section 4(4) of ECTA read together with Schedule 2 at the very end of ECTA, excludes the following agreements and clearly states that ECTA does not validate any of the following agreements:

 

  1. Immovable Property Sale Agreements,
  2. Long-Term leases,
  3. Wills and
  4. Bills of Exchange (such as a cheque).

The Alienation of Land Act 68 of 1981 (the Alienation of Land Act) provides in section 2(1) that no sale of land will be of any force and effect unless it is contained in a written deed of alienation signed by the parties or their agents, who act under the parties’ written authority. Offers to purchase or agreement of the sale for an immovable property are examples of such deeds of alienation.

 

A contract of sale for a vehicle can be entered into electronically, but when it comes to the selling and purchasing of immovable property, the agreement has to be in writing and signed by the parties. Therefore, a signature, for purposes of this transaction must be the act of physically signing by hand and does not include data messages.

Parties may still communicate terms of their agreements via email, WhatsApp, or SMS. The Offer to Purchase shall, however only be enforceable and valid once the provision of the Alienation of Land Act has been complied with.

 

Author

Hilde Eksteen