Preservation of documents bearing one or more electronic signatures: Good practices
Do you use electronic signatures in your transactions? Good! Here’s how to keep and archive them according to generally accepted practices in several everyday situations.
Situation A
The seller’s agency and the buyer’s agency use electronic signatures and a compliant electronic document management (EDM) tool.
Good practices
- The seller’s broker receives by email a promise to purchase with an electronic signature from the buyer’s broker;
- He submits the document to the seller, who also uses electronic signature;
- The seller’s broker and the buyer’s broker immediately transfer to their respective agency the documents as and when they are signed, so they can be recorded in the agency’s electronic document management (EDM) system;
- Each of these authentication certificates is kept in the EDM system of the broker’s agency that started the electronic signing process.
Situation B
Agencies use an electronic document management (EDM) tool, a broker uses electronic signature and the other a manual signature.
Good practices
- The seller’s broker receives by email a promise to purchase (PP) with an electronic signature from the buyer’s broker;
- The seller’s broker immediately transfers the PP signed electronically in his agency’s EDM system;
- He prints the PP so that the seller can sign manually;
- He digitizes the PP signed by the seller, according to the protocol established by the agency, and forwards it to the buyer’s broker;
- He enters the PP in the EDM system of his agency;
- Upon receipt, the buyer’s broker enters the PP in the EDM system of his agency;
- Only the buyer’s broker keeps the authentication certificate in his agency’s EDM system.
The three documents will then be stored in the EDM system and could be identified as follows:
- PP12345 - signed electronically by the buyer [entire document]
- PP12345 - authentication certificate
- PA12345 - seller’s manual signature [document printed with manual signature]
Situation C
Agencies use electronic signature and keep paper documents.
Good practices
- Each agency must ensure that all the documents are transmitted to it electronically upon signing. This is in order to start the preservation process of electronically signed documents and their authentication certificate on a computer medium, if applicable;
- The agency must print the documents received to keep records and registers;
- Paper records must include indications regarding the location of the electronic documents that cannot be destroyed before the six-year period provided by the Act. In this context, caution is needed and you must ensure proper backups to preserve the records and clearly identify them.
OTHER RULES TO BE OBSERVED
Electronic and manual signature of a brokerage contract - to be avoided
To preserve the concept of contract duplicate, there cannot be two different signature methods when taking up a brokerage contract, for example, you signing manually and the client electronically. You should sign the document electronically and send it to your client so he can affix his electronic signature as well.
No medium change
Regardless of the document management type used by the agency or the broker acting on his own account (paper or electronic records), the electronically signed documents must be kept on an electronic medium. Why? Such a document includes encrypted information that helps verify the authenticity of the document. This information is an integral part of the document and must be kept just as long as the document itself exists. It’s the electronic form that the broker must send to the other broker engaged in the transaction, making it possible to validate the authenticity of signatures in the document.
Preserving the authentication certificate
For the broker who starts the electronic signing process, it is also essential to preserve the authentication certificate in the agency’s record. This certificate contains information such as the author, creation date, file type, date and time of exchanges and consultations, IP addresses, signatories, etc. It can be designated under different names depending on the solution used–e-Z-Sign of e-Z-max firm designates it by Electronic proof element, whereas, Authentisign® of Instanet Solutions firm calls it Signing certificate.
When sending documents to the lender, the notary or any other body authorized to intervene in the case, including the OACIQ, the entire file shall be sent. This also involves all the electronically signed documents. The authentication certificate could also be required.
Establishing a clear and specific procedure
To be able to meet the legal value preservation requirements, it is essential that the agency or the broker acting on his own account establish a specific procedure, especially in mixed signature transactions, i.e., where some record documents are signed manually and others electronically. Furthermore, and most importantly, in all records containing electronic signatures, the document must be sent immediately to the agency, even during the acceptance process to avoid loss of documents.
In short, whether we favour paper or electronic document management, we have to remember that any document signed electronically should be kept in its original format and should not undergo any medium change or transformation.
For any questions, please contact Info OACIQ by email at info@oaciq.com, or by telephone at 450-462-9800 or 1-800-440-7170.
Need to refresh your memory? Please read the following article about the electronic signature:
ALSO CHECK:
- Reference number
- 201595
- Last update
- March 27, 2019