Advantages of electronic signature in rental contracts

In the last year, the digitization of business processes has become widespread in all sectors. The use of digital tools such as electronic signatures is improving day-to-day business management, leading to an effective transformation in industries such as real estate, currently immersed in the process of digitization. 

In this post we talk about the use of electronic signatures in rental contracts and the advantages it brings to speed up the commercial process.

What is the electronic signature of a rental contract?

According to the Regulation (EU) 910/2014,  which defines and regulates electronic signatures in the European Union, electronic signatures means "data in electronic form which is attached to or logically associated with other data in electronic form and which is used by the signatory to sign".

In addition, the eIDAS Regulation defines three types of electronic signatures: simple, advanced and qualified electronic signature, with a different degree in terms of security levels and generation of proof and evidence.

In the case of a rental contract for a dwelling, premises or other real estate, it is advisable to use a qualified electronic signature since there is a need to provide legal certainty to the parties so that:

- the signatories are unequivocally identified,
- the signatories cannot deny that they have signed,
- the document is the original and has not been modified.

An example of a rental contract signature using the One-Shot Signature service, which allows the electronic signature with a digital certificate without the need for the client to already have one, could be the following: 

1. Send your customer the rental contract, with the ability to sign multiple documents in a single transaction and interaction.
2. The customer will receive an email and from anywhere, he can sign all the documents sent by digital certificate.
3. After signing, customers will receive a copy of the signed document, which they can download at any time. 

Digital transformation as a key factor for the survival of real estate companies after COVID-19

The post-COVID-19 real estate company will be digital or it won't be. Despite facing a scenario where major transactions have come to a standstill, according to the report Trends in the real estate market in Europe 2021, the sector is in full transformation, highlighting the rise of technological tools to overcome the two major challenges: revitalizing the activity again and boosting the digitization of the sector.

In the last year, real estate technology has experienced a significant acceleration, mostly boosted by the pandemic and new customer demands. In the new real estate market, marked by the effects of the global health crisis, the use of electronic signatures offers new opportunities to improve the customer experience and, internally, the redesign of all document signature processes in real estate agencies, achieving an increase in efficiency, a significant decrease in costs and an increase in productivity.

Advantages of Uanataca's electronic signature to speed up the closing of rental contracts

The process of on-site signing a rental contract is complicated from start to finish. The signing parties, obliged to come in person to sign, must assume the extra cost of travel and the consequent loss of time. Likewise, before formalizing the contract, both copies must be printed and checked to ensure that they match the original for subsequent signing. Again, the filing and custody of the signed and received copy is another of the inconveniences that the parties must assume. 

If you work in the real estate sector and market homes or other properties for sale or rent, it is in your interest that the transaction is closed as soon as possible to meet the client's expectations and receive your fees. This implies the need to speed up the signing process and for this, it is necessary to implement the electronic signature.  

1. FLEXIBILITY AND RAPIDITY

The process of on-site signing a rental contract often causes delays in the closing of the transaction, which can take weeks, even months from the previous organization of the documents, printing, review and archiving.

In contrast, electronic signatures simplify and streamline the lease signing process and, in the case of qualified electronic signatures, provide the highest level of security and maximum legal guarantees. Through its use, sales can be closed instantly and 100% online, avoiding physical trips and/or long waits.

In addition, electronic signatures provide great flexibility, both geographically and temporally, for the Real Estate company and its clients, whether they are owners, buyers or lessees.

2. 100% PAPERLESS PROCESS

Before formalizing the rental contract on paper, copies must be printed for each and every one of the parties. Once the contract is formalized, the physical file and the documentary custody inherent to the handwritten signature is a source of costs maintained over time. 

The electronic signature allows 100% paperless processes, significantly reducing printing costs, associated costs and indirect costs, resulting from inefficient use of equipment and loss of time in administrative tasks.

Similarly, the electronic signature is a tool that allows real estate agents to keep their files digitized and 100% secure, reducing document management costs and exclusive storage space.
Finally, by minimizing manual actions, possible human errors are avoided as well as loss or deterioration of documentation.

3.- THE BEST CUSTOMER EXPERIENCE

Today, customer expectations have evolved and in the real estate market, price differentiation is no longer effective. According to a TGA study, consumers increasingly value aspects such as service, experience and support throughout the purchase and delivery process.

Uanataca's electronic signature solutions, adapted to the real estate sector, have been designed to provide the best signature experience to the customer. In the new customer-oriented business model, the One-Shot Signature service offers a relevant, simple and valuable interaction.

4.- VALUE-ADDED OFFER COMPARED TO THE COMPETITION  

In the current scenario, the greatest differential value of a business is technological innovation. The use of the electronic signature in a real estate contract is not only valid, but it is also advisable to favor the dynamism of the sector and the user experience it offers.

Technological advances and digital tools attract consumers and serve as a differential value compared to other offers in the market. They value more companies and organizations that are committed to research and development and are perceived as innovative in their products, processes and organization, among others.

According to Fortune magazine, the most admired companies are Apple, Amazon and Alphabet, all of which are technology companies that lead change and innovation.

Uses of electronic signatures in the real estate sector

- Reservation contracts
- Deposit contracts
- Rental contracts
- Signature of authorization to request references
- Signing of power of attorney document for the management of contracts with supply companies 
- Signing of real estate management contracts (sales orders, exclusivity, acceptance of offer, etc.)
- Signing of payment authorization (SEPA mandate)
- Signing of home insurance policies

In short, the real estate sector is reinventing itself with a digital proposal in line with the demands of the new market in which they operate. In the future, technological innovations will not lead to the disappearance of small and medium-sized companies, but to their conversion into customer-oriented business models, where digital tools such as electronic signatures will help them to be more efficient and competitive.