SIGNING YOUR AGREEMENT OF SALE OF LAND ELECTRONICALLY
The big “C-word”, Covid-19, hit the whole world with a bang, limiting face to face interaction and forcing people all over the world to find alternative communication measures- with South Africa being no exception. This had a massive impact on the property industry as contact between people became limited but the buying and selling of properties continued with full force. Estate agents had to come up with creative measures to advertise and show properties and to manage client expectations. Fortunately, technology made it possible for virtual viewings and email communications. The world became “small” as now, you could view and purchase a property while conveniently lazing on your couch. This is the “new normal” and many properties are still being bought and sold in this manner.
The big question however is whether an offer to purchase could be signed electronically?
In order to answer this question, one must look at the Alienation of Land Act of 1981 and the Electronic Communications and Transactions Act 25 of 2002. In terms of the Alienation of Land act, one of the requirements of a valid agreement of sale is that all parties (being the seller and purchaser), or their duly authorised agents/representatives need to sign the agreement. The Electronic Communications and Transactions Act furthermore explicitly states that electronic signatures may not be used for sale agreements of immovable property as stipulated in the Alienation of Land Act. It has been trite law in South Africa for years now that signing a sale agreement of land needs to be done manually by a person holding a pen (a “wet-ink” signature). Is this however still applicable in our new, “normal”, techno- driven ways of hustling?
In the 2020 court case Borcherds and Another v Duxbury and Others, heard in the High Court of Port Elizabeth, the judgement was contradictory to the legislative position mentioned above. One of the arguments was whether or not an electronic signature constituted a legal and binding agreement of sale of land. The crux of this case, for purposes of this article, is the Court indication that the function of one’s signature is to authenticate the identification of the signatory and the electronic signature that was used in this instance fulfilled this purpose. It was the intention of both parties to enter into the agreement of sale of immovable property and the agreement was thus legally binding and enforceable.
In light of the above, we still advise that you treat electronic signatures of an agreement of sale of land very carefully. The judgment herein was a single ruling by a Court in the Eastern Cape, which ruling does not constitute a precedent for all similar matters. Until legislation makes provision for electronic signatures on agreements of sale for immovable property, we suggest you rather make the effort to sign your sale agreements manually (“old school wet-ink style”).
Article by Lorandi van der Merwe (LLB), Associate
For more information, kindly contact Lorandi on lorandi@rgprok.com or 044 601 9900. www.rgprok.co.za
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Disclaimer
Nothing contained in this publication is to be considered as the rendering of legal advice for specific cases, and readers are responsible for obtaining such advice from their own legal counsel. This publication is intended for educational and informational purposes only.
