Autor*in: Marco Schmid

Sign a rental contract digitally

Nowadays, especially in conurbations, searching for a flat is highly nerve-racking. Real estate portals on the net, online applications, or, as in pandemic times, online tours are already part of the norm.

This poses further problems for the owners or managers of a real estate agency, management, or brokerage: How do you protect the health of your employees, like when signing a rental contract, which is, after all, part of the daily business processes? In addition, the digitalization and automation of processes have impacted the real estate industry. What are the challenges, and how can you react to them?


Digital transformation in the real estate industry

Digitale Transformation in der Immobilienbranche

Increasing digitization means that companies have to rethink processes and strategies if they want to remain competitive. This impacts the real estate industry as well. Simple printouts and notices of advertised apartments and houses have ceased to be sufficient. Advertisements on the relevant web real estate portals have recently become state-of-the-art of real estate agencies. And digital transformation is also forcing new and optimized processes.

In particular, employees in the home office, remote mode, virtual conferences, and meetings with customers must be given more significant consideration in the real estate industry in the future. To respond to the demands of new work processes and the protection of employees, managing directors and owners in the real estate industry must increasingly deal with the digitalization of various processes. This includes, for example, the electronic signature on rental agreements.


Requirements for the electronic signature on rental contracts and tenancy agreements

For example, suppose a flat is rented from a private owner to private individuals. In that case, an informal agreement signed by both contracting parties is sufficient in the classic and analog manner. A simple electronic signature would be enough as a counterpart in many cases.

It becomes more complicated, for example, if a tenancy agreement is temporary and electronically signed simultaneously. In the classic case, the written form is required in accordance, f.e. in the German Civil Code (BGB) § 550 and § 575.1. Since 2016, the legislator has made it possible to conclude such contracts with a legally valid qualified electronic signature.


Required electronic signature type for rental agreements

However, signing tenancy agreements electronically offers advantages beyond infection control. It accepts the GTC with a tick or signing with a pen on the tablet. These are all forms of simple electronic signatures. For a tenancy contract, more than this type of signature is required. It requires at least the advanced electronic signature or the qualified electronic signature for temporary tenancy agreements.

Specific requirements must be met, not only regarding the technologies.

In 2016, the legislator legally regulated using the electronic signature with the eIDAS Regulation. This also includes the identification and authentication of the contractual partners.

Umzug nach einem digital signierten Mietvertrag


Legal certainty of the electronic signature for rental agreements

Landlords and tenants are interested in signing a rental contract that generally provides both parties with legal certainty. Some still need to learn that electronically signed documents have a different legal effect than documents signed in person and handwritten. The legislator has already regulated cases where a tenancy agreement can be signed digitally. You can sign rental contracts indefinitely with an advanced electronic signature in a legally valid manner. In contrast, tenancy agreements for a temporary period require a qualified electronic signature.

Digitally signed rental agreements must meet specific criteria to be legally valid:

  • The contracting parties must unambiguously authenticate themselves.
  • The creation of a unique signature key.
  • The detectability of manipulation of a signature must be guaranteed.

With an electronic signature, you can trace a comprehensive audit trail of when a document was signed and by which contracting party it was signed. An electronic signature offers better security because it cannot be easily copied or manipulated like a handwritten signature.


Further use cases of electronic signatures in real estate transactions

In addition to rental agreements, real estate industry representatives can benefit from the advantages of electronic signatures in many other areas.

1. Handover protocol

Once the rental agreement has been signed, the flat is handed over at the start or, in the other case, at the end of the tenancy. A handover protocol in which the condition and, if applicable, defects of the flat are recorded is standard. This handover protocol can also be signed electronically by the tenants in a legally secure way - for example, on a mobile device.

2. Service charge statement

Regularly billing service charges is part of the daily work of property managers and real estate agencies. The usual method is a written statement, which is often manually prepared in lengthy processes and sent by post. However, such a statement can be signed and sent electronically without problems.

3. Tenant self-disclosure

Prospective tenants must first fill out and sign a self-disclosure form. Such information is not subject to formal requirements and can be quickly signed electronically. This is a clear advantage, especially in the fast-moving housing market.

4. Notice of termination

The formalities for giving notice of termination are often stipulated in the tenancy agreement. In principle, however, there are no formal requirements for terminating tenancy agreements. By law, a tenancy agreement must be completed in writing, but this can also be done digitally with a qualified electronic signature without any problems.


Advantages of using electronic signatures in the real estate industry 

The use of electronic signatures in the real estate industry offers clear advantages over traditional handwritten signatures:


Documents must not be printed, signed, and scanned on all pages first but can be digitally signed and forwarded immediately. Contractual partners can also sign the documents at the same time. This also saves money.

Lowering the error rate

With appropriate software, you can save and reuse document templates as you wish. This minimizes the error rate immensely.

Document security

The electronic copies of the signed tenancy agreements can be stored securely in the cloud.

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