The real estate industry wants the State Government to tear down the “last bastion” of what it describes as archaic regulation, which requires agents to be present during the signing of electronic contracts to buy houses.
But lawyers are worried the rules are already too slack, arguing home buying contracts should only be signed physically, on paper, to ensure security for home buyers.
Real Estate Institute CEO Greg Troughton told InDaily last year’s changes to regulations which opened up the possibility of electronic contracts for house purchases failed to take the final step needed for the convenience of customers in the modern age.
“We would love our members to be able to send contracts to other locations, because currently our members can only do (those) transactions electronically in the presence of our agent,” said Troughton.
“That would be an enormous assistance to a lot of regional (home buyers).
“I’ve got lots of people that … drive hundreds of kilometres to get signatures.
He said the change would “enable anyone anywhere in the world to sign contracts electronically, get them witnessed and send them back”.
“This is all about convenience for the customers.”
But safeguards for home buyers signing electronic contracts are already too weak, says Law Society of South Australia president Rocco Perrotta.
“The society’s greatest concern is the potential risk of electronic contracts being amended or varied after they have been ‘signed’ by one or both of the parties,” Perrotta said, in a submission to the State Government’s consultation on further changes this week.
“The society is not aware of any software available at present that would enable a party to a land transaction to be absolutely certain that an electronic contract to which he or she affixes an electronic signature will be permanently unchangeable, without his or her consent, both before and after it is signed by the other party.
“The society does not accept that the rights of parties to land contracts should be compromised for the sake of convenience of land agents.
“It should also be noted that purchasers of land are in a particularly vulnerable position, since land agents commonly act on behalf of vendors.”
Attorney-General John Rau
A Law Society spokesperson said this morning that while the society remains opposed to electronic contracts for house purchases, it did not have an established view on the Real Estate Institute’s latest proposal.
Nonetheless, Troughton accused the legal profession of backward thinking.
“Sometimes the lawyers really love the ink and quill,” he said.
“We’ve had over 800 transactions done electronically (with the agent present).
“There is ample protection for people to make sure the right thing is done.”
Troughton suggested a two-stage verification process would provide home buyers with the security they need to have confidence signing an electronic contract without the agent being in the room.
He said an email could be sent to the prospective buyer’s address, and a password sent to their mobile phone, to allow access to the electronic contract.
Attorney-General John Rau said he was currently consulting on the draft regulations and “the Law Society feedback, along with any other feedback received, will be considered before a final decision is made”.
“It is already an offence to change a contract once it has been signed, without the consent of all parties,” he said.
