September 1st - 2011

You’ve got mail: New clause offers added choice for electronic transmission

Sending documents by email and through the internet is becoming increasingly common in business, including real estate.

Sending documents by email and through the internet is becoming increasingly common in business, including real estate.

“Transmitting documents electronically is happening more often in most businesses, and many real estate professionals use the technology on a daily basis,” says Mike Douglas, a REALTOR® from Barrie and the chair of the OREA electronic signatures task force.

A new standard clause was developed by the Ontario Real Estate Association to enhance the convenience and efficiency of sending scanned notices and documents by email.

This new clause can be inserted into the Agreement of Purchase and Sale (APS) to indicate that the parties involved in a real estate transaction agree to send and receive documents via email and to use the specified email addresses. The current APS provides a space for fax numbers but not email addresses.

The law has long recognized that parties to an agreement may, as part of the agreement, agree on acceptable modes of communicating offers, acceptances and notices. The new clause makes it clear that the parties have specifically agreed that email communication is an acceptable method of communication.

As Douglas says, “This clause will help ensure that everyone is in full agreement with the chosen method of delivering notices,” he says. “As with many situations we encounter in our business, the more clearly we communicate, the better it is for everyone.”

However, the clause should be used with caution. “If you use the clause, you should take care to ensure there are no misunderstandings about the legal status of a transaction,” Douglas advises. “Verify that you’ve sent the document to the correct email address. If the document is time-sensitive, make sure it was received and check the status of the transaction and related documents against the deadlines in the agreement.”

Documented proof of delivery is at the heart of this issue, says Douglas.

“If I scan a signed, time-sensitive document from my buyer and send it to a listing brokerage by email, I need to be sure it’s been received,” says Douglas. “If the recipient doesn’t open the email right away or doesn’t receive it because of a delivery problem, I can’t prove I sent it on time. In a situation where there are competing offers on a property or when a condition is due to be removed by a certain time, I could be leaving my client and myself open to a problem, especially if I can’t prove that I sent it before the deadline.”

The internet is quick and convenient, and Douglas employs it frequently. “I communicate via email many times a day, but in a time-sensitive situation with a deadline, I follow up by sending a copy by fax to the other brokerage. It’s an extra step, but using both fax and email protects my clients and my brokerage.”

A fax transmission includes a date and time stamp -- physical proof that a document was delivered, he notes. “Courts have agreed that fax transmission receipts are considered acceptable proof of a notice being delivered. If a dispute arises six months or six years later and someone claims that I didn’t send a document on time, the date and time stamp on the fax receipt in my file will cover me.”

However, since fax transmissions are not infallible, a careful practitioner should, depending on the circumstances, consider other ways of confirming that time-sensitive documents have been received on deadline by the other side. This can be done by calling the other side and/or personally delivering the document.

New Clause
The new clause, seen below, can be inserted into Schedule A of the APS.

In addition to any other provisions for delivery of documents and notices set out in this Agreement of Purchase and Sale or any Schedule thereto, this offer, any counter-offer, notice of acceptance thereof or any notice to be given or received pursuant to this Agreement or any Schedule hereto shall be deemed given and received when transmitted electronically to the email address provided below, in which case, the signature(s) of the party (parties) shall be deemed to be original.

Email Address…………………………………for delivery of documents to Seller.

Email Address…………………………………for delivery of documents to Buyer.

Caution: Care must be taken to ensure that the email has been sent to the correct email address. If the delivery of a document must be made within a definite time period, registrants should verify that the document has in fact been received and verify the status of a transaction and related documentation based on the required time periods and other provision(s) set out in the Agreement.

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For more information contact

Ontario Real Estate Association

Jean-Adrien Delicano

Manager, Media Relations

JeanAdrienD@orea.com

416-445-9910 ext. 246