Behind the Curtain

E-Commerce and E-Sign Exposed


 Cori Lamont  |    June 15, 2010
BehindtheCurtain.jpg

Since the WB-11 Residential Offer to Purchase became mandatory March 1, 2010, we have received numerous questions about email delivery. The following is an attempt to provide you with a peek behind the curtain of the E-Commerce and E-Sign laws. Essentially, this is an effort to strip down the process to its basic core by providing the most frequently asked questions relating to email delivery.

What is the difference between E-Commerce and E-sign? 

E-Commerce is the Wisconsin law addressing electronic commerce.

E-Sign is the federal law addressing electronic commerce requiring consumer electronic consent.

What transactions need to meet E-Commerce and E-Sign requirements? 

Consumer transactions. Consumer transactions typically involve individuals buying or selling residential properties because they will be using the property or the proceeds for personal, family or household purposes. Transactions that are strictly commercial or involve two businesses as parties are not consumer transactions.

What does an agent need to do to meet these requirements? 

In simple terms, two steps must be performed:

Step 1. Electronic consent
Step 2. Inclusion of email delivery language  in the contract used

Step 1) Accomplish electronic consent (the easy way) 

A. Send an email because the party must provide consent electronically to the use of email and electronic documents and signatures in the transaction.

B. Go to www.wra.org/ecommerce.

C. Go to the third bullet 2008 Forms for Electronic Commerce NEW!

D. Select and open the Word document “Consent for Use of Electronic Documents and Signatures in Consumer Real Estate Transactions.”

E. Save this document to your computer (customize it later with your company and contact information).

F. When it’s time to send it to the consumer, take the following steps: 

  1. Compose the email and in the body of the email where you type your message, copy and paste the contents of the Word document you saved.
  2. Send the email to the party.
  3. The party should read the disclosure information. The consent the WRA created automatically embeds or attaches a Word and PDF document.
  4. These are generic and do not relate to the transaction. The consumer needs to make sure they can open up each.
  5. Presuming the party wishes to authorize electronic documents and email delivery for the transaction, the party clicks “reply.”
  6. The consumer then types in the party’s name (as the party’s electronic signature) and email address.
  7. The consumer clicks “Send” to return the email to the agent. You have electronic consent.

Step 2) Include email delivery language in the contract 

A. WB-11 Residential Offer to Purchase — check the Email Delivery box.

B. Other offer to purchase forms, listing contracts and buyer agency agreements:

  1. Execute the WRA Addendum D and attach and incorporate into the contract; or
  2. Insert delivery language in the additional provisions. Provided below is sample language; the line references would vary depending on the contract used.
    In addition to the methods of delivery authorized on lines XXX-XXX of this [Offer, Listing, Buyer Agency], delivery of documents and written notices to a party shall be also effective when accomplished by: Email: electronically transmitting the document or written notice to the party’s email address given below. If this is a consumer transaction where the property being sold is used primarily for personal, family or household purposes, each consumer stating an email address below has first consented electronically to the use of electronic documents, email delivery and electronic signatures in the transaction, as required by federal law.

For Offer

Email address for Seller: ___________________________
Email address for Buyer: ___________________________

For Listing
Email address for Seller: ___________________________
Email address for Broker/Firm: _____________________

For Buyer Agency
Email address for Buyer: ___________________________
Email address for Broker/Firm: ______________________

What does the WRA electronic consent Word version look like? 
 
CONSENT FOR USE OF ELECTRONIC DOCUMENTS AND SIGNATURES IN CONSUMER REAL ESTATE TRANSACTIONS
 
If you want the option of sending and receiving real estate transaction documents by email, federal law requires certain safeguards to ensure that consumers like you have the capability to receive such disclosures and are fully aware of the consequences of agreeing to receive documents electronically. Federal law requires your consent to use email and electronic versions of information, disclosures, contracts and other documents and records (“electronic documents”) that would otherwise be legally effective only if provided to you in a printed/written paper document.

Understanding Electronic “Lingo:” “Electronic documents” include the documents you may save on your computer or attach to email. They can typically be printed out, but exist independently in an electronic form on your computer.
“Electronic signatures” are sometimes hard to conceptualize. An “electronic signature” includes any mark, symbol, sound or process that is written, stamped, engraved, attached to or logically associated with an electronic document and executed by a person with the intent to sign. 
 
Just like you can legally “sign” a printed document by making your mark, whether that be your cursive signature in ink or an “X,” so you can “sign” an electronic document by making your mark, whether that be a high-tech encrypted or digital signature or just typing your name in the signature line or space on an email or document on the computer — these are all electronic signatures. If you sign a paper document in ink and then scan the document and save it on your computer, the image of the cursive signature on the stored electronic document on your computer is also an electronic signature.
  1. Right to receive paper document:You have the right to have any document provided in paper form. If you want a paper copy of any document sent to you by email, send your request to the broker at the mail or email address provided below. Paper copies will be provided at no charge.
  2. Right to withdraw consent: You have the right to withdraw your consent to receive electronic documents by email by contacting the broker by mail or email at the address provided below. The legal validity and enforceability of the electronic documents, signatures and deliveries used prior to withdrawal of consent will not be affected.
  3. Changes to your email address: You should keep the broker informed of any change in your electronic or emailing address. Please contact the broker as promptly as possible by mail or email at the address provided below regarding any such changes.
  4. Minimum hardware and software requirements: The following hardware and software are required to access (open and read) and retain (save) the electronic documents: 
    • Operating Systems: Windows 98, Windows 2000, Windows XP or Windows Vista; or Macintosh OS 8.1 or higher
    • Browsers: Internet Explorer 5.01 or above or equivalent
    • Software/electronic document formats: Adobe Acrobat Reader or equivalent for PDF files; Word program for Word files.
  5. Your ability to access disclosures:By completing and emailing this consent to the broker, you acknowledge that you can access and retain the electronic documents in Sample Files above.
  6. Consent to electronic signatures and documents:By completing and emailing this consent form to the broker at the email address specified below you are providing electronic consent to the use of electronic documents and signatures in your real estate transaction. Specifically, you are acknowledging receipt of this form and consenting to the use of electronic documents, email delivery of documents, and electronic signatures in any real estate transactions involving you, the broker identified below and other parties. If you prefer instead to limit this consent to the transaction relative to a specific property, provide the property address or description below.
Is it electronic consent if a consumer prints off the consent, signs it and faxes it back? 
No. The electronic consent must be obtained electronically. A consumer signing a hard copy or faxing back the document would not be sufficient.

Isn’t the Addendum D the electronic consent? 
No. Addendum D includes email delivery language to be included in a contract, not the electronic consent.

Does electronic consent only need to be done once or with every contract? 
Only once. If the listing agent did electronic consent at the time of listing, then the seller is not required to do it again even if the offer includes email delivery.

Is Addendum D needed with the revised WB-11 Residential Offer to Purchase? 
No. However, licensees are still required to obtain electronic consent before including an email address. Lines 48-49 of the WB-11 provide: “[E]ach consumer providing an email address below has first consented electronically to the use of electronic documents, email delivery and electronic signatures in the transaction…”  

What if the email delivery box is checked in the WB-11 Residential Offer to Purchase, but there was no electronic consent? 
Any real estate licensee drafting an offer for a consumer who includes an email address at line 52 or 55 is affirmatively stating or representing that the consumer has previously provided electronic consent. A party who signs an offer that includes his or her email address is also affirmatively stating and representing that he or she has provided proper electronic consent and is committing fraud if this is not true. It is arguably incompetent practice to include an email address without first obtaining the consumer’s electronic consent.  

Which email address should be included in the offer: the agent’s or consumer’s? 
Either. The offer is drafted to accomplish the intent of the party. However if your party does not object, then the agent’s email address may be inserted. This is most easily explained if you compare the email address to the fax number used as Delivery in the offer. Most often the parties do not use their own fax numbers or mailing addresses, but use those of the parties’ respective agent.  If the parties include their respective email addresses, then keep in mind that each side would have the other’s email address. This could create the opportunity for the buyer and seller to contact one other, which is legally permissible, but may create unnecessary drama.

If the agent’s email address is included, does the agent still need electronic consent from the consumer? 
Yes. The federal law is concerned about the protection of consumers purchasing property primarily for personal, family or household purposes, so much so that the law requires the consumer consent electronically to the use of electronic documents, email delivery, and electronic signatures in the transaction.  Because there is not any state or federal case law regarding this issue, the WRA responds with a conservative position to enable agents to forward documents received to the parties via email.

How do agents incorporate email delivery into the listing and buyer agency agreements? 
Each agent would be required to achieve the two steps: 1) Electronic consent; 2) Inclusion of email delivery language, either by incorporating Addendum D or inserting language into the additional provisions of the form. Remember that when a buyer writes an offer, the contract still needs to include email delivery language between buyer and seller.

Does an agent working with a buyer-customer still need to get the buyer’s electronic consent?
Yes, address the consent at the same time as the Broker Disclosure to Customer form. 

Must the listing broker request proof of electronic consent from the cooperating broker? 
No. The listing company may find it beneficial to confirm on behalf of the seller that the buyer electronically consented to email as a form of delivery and the use of electronic signatures.  If the transaction involves a buyer-customer, the listing company may wish to request proof since the agent is drafting the offer as a subagent of the listing company. When it involves a buyer-client, the buyer’s agent would not be obligated to provide any proof.

Cori Lamont is Director of Brokerage Regulation and Licensing for the WRA.  
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