The Electronic Signature Act

     ELECTRONIC SIGNATURE.—The term ''electronic signature'' means a signature in electronic form, attached to or logically associated with an electronic record, that—
    (A) is intended by the parties to signify agreement to a contract or agreement;
    (B) is capable of verifying the identity of the person using the signature; and
    (C) is linked to the electronic record in a manner that prevents alteration of the record after signature.
 

How does the Electronic Signature Act affect the Multi-family Industry?

      “I have online applications on my Website, but don’t the prospective residents have to come in the office to sign those documents?”

     Not according to Federal Law. The Electronic Signature Act was signed into law by former President Bill Clinton on June 30, 2000. Dubbed "E-Sign law," it requires that consumers consent to conducting business online and assures consumer protection that is equivalent to those in the paper world when entering into an electronic contract. The law will enable consumers and business professionals to set up online brokerage accounts, take out a mortgage, or sign checks, loan and credit applications, and insurance policies.

     An electronic contract is an agreement created and "signed" in electronic form -- in other words, no paper or other hard copies are used. The e-signature is not actually an online signature, but a series of mouse clicks or key strokes that are unique to the user.

 Since a traditional ink signature isn't possible on an electronic contract, people have used several different ways to indicate their electronic signatures, including typing the signer's name into the signature area, pasting in a scanned version of the signer's signature, clicking an "I Accept" button or using cryptographic "scrambling" technology.  

   If you're worried about fraud, the law is behind you: “All the same laws related to fraud and forgery which apply in the paper world will also apply to the online world,” said Jeremiah S. Buckley of the Electronic Financial Services Council.

     To protect consumers from potential abuses, some legal documents and contracts are exempt from the E-signature law. In other words, electronic versions of the following documents are invalid and unenforceable and must be provided in a traditional paper and ink format:

  • wills, codicils and testamentary trusts
  • documents relating to adoption, divorce and other family law matters
  • court orders, notices and other court documents such as pleadings or motions
  • notices of cancellation or termination of utility services
  • notices of default, repossession, foreclosure or eviction
  • notices of cancellation or termination of health or life insurance benefits
  • product recall notices affecting health or safety, and

  • documents required by law to accompany the transportation of hazardous materials.
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