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Nowadays is possible to comfortably seat on your sofa and go through all the tedious e-signing of SPA and Loan Agreement

E-signing & E-contract: The 2 REvolutionary Shifts for 2021

Pandemic, the property industry, e-contract and e-signing; a disruptive digital transformation wave has turned upside down the way we were all used to collect information and select the property development project we wanted to invest in, visiting several sales galleries and finally placing a booking on the chosen one.

E-signing & E-contract: 2 big changes to get ready for in 2021

E-signing & E-contract: The 2 REvolutionary Property Shifts for 2021

Since March 2020, though, words as mask-wearing-at-all-times, stay home, stay safe, work-from-home, social distancing, MCO, CMCO or RMCO have become the passwords to a New Normal.We don’t go outing as much as we did before, and, even the ongoing Chinese New Year celebrations, have been happening at much quieter and less crowd-seeking way!

Real Estate in Emergency Room (ER)

E-signing

The property industry, which was already under intensive care before the Covid-19 show-off, went through a collapse during the second quarter 2020. However, concerned developers started looking at how to keep their boats floating in this disruptive storm. 

Digital transformation applied to property, PropTech in other words, which has been available for property stakeholders to use since several years, suddenly has become the must-have in property development with VR, AR, end-to-end-property-solution, e-signing and more. 

Several members of the Malaysia PropTech Association have confirmed this new digital adoption trend with astonishing grow rates of their businesses as more and more developers did and are approaching them asking for contactless, SOPs proof and easy to implement tech-solutions. End-to-end property solution providers, such as ProSales and ProFix, experienced a 300% or more growth of their sales while developers start going out loud about, finally, adopting virtual sales galleries, virtual walkthroughs, virtual meetings with sales representatives as far as virtual definition of bookings, e-contract and e-signing.

Digital Transformation of SPA and Loan Agreements

E-contract, e-signing and e-stamping will change the property transaction scenario in 2021

Furthermore, stuck at booking stage, the Malaysian property developers have finally adopted e-contract and e-signing applied to Sale & Purchase Agreement and Loan Agreement allowing a 100% contactless property buying journey.

Unfortunately, we all know just a little about it and still do not have the 100% awareness that they are actually an approved and fully legal way of completing the purchase of a property!

Malaysia Early Player of E-contract and E-signing

With some researches done on-line, it is easy to check that the Malaysian government has actually implemented e-signing since 1997 with the Digital Signature Act and, few years later, e-contract has been recognised with the Electronic Commerce Act in 2006. 

Unfortunately, very few know till which extend e-signing and e-contract can be applied to property transactions and still say: “For such a big decision as buying a property is, I still want to go and see physically the developer’s sales office, show house and personally talk to a lawyer!”

The boundary is actually very thin. With the digital solutions brough over by ProSales, it is nowadays possible talking to a lawyer and have the whole SPA explained plus all possible questions replied in a virtual and much safer way! The whole property buying journey is nowadays 100% possible without physical contact, let’s see how e-signing and e-contract work to raise our confidence in these digital tools.

E-signature

Maybe we didn’t realise it but we are using e-signing anytime we do an online transaction. When the bank ask you to request a TAC and then, once received it, the tac is keyed in, well that is e-signing. By definition is more a process rather than being a mere symbol affixed to an electronic document. 

Every time we click agree or a check-box in our mobile devices we are using e-signing

In an online banking transaction the above can be seen as, “Request a TAC – Receive the TAC –  Key in the TAC” verified by reference to the public key listed in a valid certificate issued by a license certification authority. In other words, an e-signature is based on cryptography which is legally recognised when is created in accordance with the DSA 1997.

E-signing or electronic signature is defined by the Electronic Commerce Act 2006 (ECA) as “any letter, character, number, sound or any other symbol or any combination thereof created in an electronic form adopted by a person as a signature”.

An “e-signature” can be in different forms such as, a “digital signature”, a short message service (SMS), a signature made electronically using a device such as a stylus or a scanned version of an actual signature, or as simple as a “tick” in a “I Agree” checkbox to indicate an online acceptance of T&C (how often we are doing it without relating it to a physical signing). An e-signature cannot be compared at all with wet-ink signatures as it is created, used and verified  using cryptography.

To get more technical information you can visit here and here two informative legal websites. 

Licenced Certification Authorities

E-signing

One last but very important information is that only “Licensed Certification Authorities” (LCA) by the Malaysian Communications and Multimedia Commission (“MCMC”) can act as  administrators on the use of digital signature. As at today, the only LCAs listed on the MCMC website are:

  • Pos Digicert Sdn. Bhd.
  • MSC Trustgate.Com Sdn. Bhd.
  • Telekom Applied Business Sdn. Bhd.
  • Raffcomm Technologies Sdn. Bhd.

In simpler words, this means that the use of digital signature must be first certified by one of the 4 above mentioned entities to be officially be recognised as a “certified digital signature”.

E-contract

According to the Electronic Commerce Act (ECA) 2006, all commercial contract can be done electronically and will be recognised in a court of law. This means that Sale and Purchase Agreement as far as Tenancy or Leasing Agreement for properties can be prepared and delivered by electronic means. 

E-signing

This long time standing act, legalises the use of soft-copy SPAs for the purchasers to read through, ask about and finally sign, as we have seen above, electronically. 

The key point of all the above, I’ve just found out about it to be honest, is how the e-contract and the whole digital e-signing process is recorded and remains traceable, in other words, digital signing must have a trail to become and remain valid and effective. The image below shows the full trail of a digital signature for an e-contract (SPA to be precise) and gives an idea of the digital details which are, and must be, collected and safely kept to give effectiveness to the e-contract! 

Strategic partnership

ProSales, once more at the front line of digital innovation, has been recently adding into its real, effective and virtual end-to-end property solution, e-contract and digital signing features through a strategic partnership.

E-signing

The strategic partner, Lepro System Bhd, has been a precursor player of the digital transformation in the real estate e-contracts and digital signing. Ms. Elizabbeth Siew, Lepro System Bhd founder and CEO, has been advocating since long a full range digital adoption in the legal side of property transactions, being them SPAs, tenancy or leasing agreements. 

Ms. Elizabbeth, who is also co-founder and current president of the Malaysia PropTech Association, a renowned international speaker and has been advising several government agencies and public listed companies about e-contract and e-signing has developed several digital solutions under Lepro System Bhd based on her long standing experience as lawyer for property developers. 

ProSales looks forward to seeing many more property developers adopting its fully integrated end-to-end property solutions ProSales and ProFix and eager to contribute in moving the Malaysian Real Estate Ecosystem from good to great!Keep in touch and drop a comment below in case you would like to know more about our solutions for the property industry!

About The Author

E-signing

The opinions expressed in this article are solely of the author, Dr Daniele Gambero. 

Dr Gambero has been an expatriate to Malaysia from Italy, since 1998 and has more than 35 years of real estate experience. He is the co-founder and group CEO of REI Group of Companies, the Co-founder of Propenomy.com and the deputy president of the Malaysia Proptech Association. 

In the past 10 years Daniele, as international and TEDX speaker, has engaged several hundreds thousand people talking about Property, Economy, Propenomy, Digital Marketing and Motivation. He is also a bestselling author and columnist on several magazines and main stream media. You can reach him directly through his LinkedIn page here

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