Ah … Finally Some Electronic Consent Relief

A recent clarification from NAR provides insight on electronic consent


 Cori Lamont  |    June 08, 2017
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In recent months, the WRA has been in communication with legal counsel from the National Association of REALTORS® (NAR) as to the application of the federal e-consent law, also known as the federal Electronic Signatures in Global and National Commerce Act (E-Sign).

A good portion of practitioners and consumers live in an electronic world. And because of this, the WRA regularly receives questions about handling the situation of one party providing electronic consent while the other cannot or may not want to provide electronic consent because the agent is the one who will receive documents on his or her behalf in the transaction. 

With guidance from NAR, the WRA can now provide some clarification as to a common and frustrating situation in which one consumer wants to conduct the real estate transaction in the electronic world — which could include electronic signatures, electronic records and email delivery — while the other does not have the ability to use electronic means or will not or does not provide electronic consent.

Clarification

The discussion with NAR provided two clarifications: 

  • Agent-to-consumer/client/customer email delivery of the agency agreement or transaction documents: Electronic consent is needed. 
  • Agent-to-agent email delivery of transaction documents: The party may authorize the agent to use the agent’s email address on the consumer’s behalf. In this situation, electronic consent is not required from the consumer. 

To help simplify and present this discussion in as straightforward a manner as possible, I present you with a series of questions and answers: 

Question: Can agents’ email addresses be used for delivery in transactional documents instead of consumers’ email addresses? 

Answer: Yes. 

Per NAR’s guidance, an agent can do this presuming the agent has authorization from the consumer to use the agent’s email address on the consumer’s behalf. However, keep in mind that electronic consent is required if the agent forwards transaction documents on to the consumer’s email address. 

Question: Can agents use their email addresses instead of the consumers’ email addresses for delivery in the offer to purchase even though one or both of the consumers cannot or will not provide electronic consent? 

Answer: Yes. 

Rather than shutting down one party’s use of technology when the other party does not or cannot use technology and thus will not provide electronic consent, the offer allows each party to authorize delivery of documents in a practical method. 

Question: When a party authorizes the agent to include the agent’s email address in the offer to purchase or some other transaction document, does that authorization have to be in writing? 

Answer: No. 

However, like most things in life and real estate, it’s typically easier to defend when there is written evidence. While obtaining the consumer’s authorization allowing the agent to use the agent’s email address for delivery in the transaction is preferred, it is not required by the law. Company policy will provide guidance for the agent on how to proceed relating to the authorization. 

For instance, when someone says they have the authority under a power of attorney to act on behalf of someone else, the person claiming to have the authority is the one who must bear the burden of proving they have the proper authority to act in the capacity of power of attorney.

The easiest way to prove authority to act as a power of attorney is by providing written evidence. The same would be true if a consumer later claims never to have authorized the use of the agent’s email address on the consumer’s behalf in a real estate transaction.
One way to obtain written authorization could be to use the following language in the offer or other transaction document: 

If the agent’s email address appears in the email delivery section of the offer to purchase or other transaction document and the consumer has not provided electronic consent, the consumer authorizes the use of that email address on the consumer’s behalf.

Another way would be to use the following language in a listing contract, buyer agency agreement or other agency agreement: 

Client authorizes the use of the email address of an agent associated with the Firm in the email delivery section of the offer to purchase or other transaction document and hereby authorizes the use of that email address on the consumer’s behalf for delivery of documents and written notices. 

Keep in mind, if you forward the transaction documents and/or notices you received from the other agent in these circumstances to your party by email, then arguably you would need to obtain electronic consent from the consumer because you have triggered the E-Sign law. For example, if a listing agent sends a lead-based paint (LBP) disclosure to the buyer’s agent, the buyer’s agent must have the buyer’s electronic consent to forward the LBP disclosure to the buyer’s email. If the agent is going to print out and deliver the LBP disclosure to the buyer personally, by fax or by mail as agreed upon in the offer, the agent does not need to obtain electronic consent.

Question: Is there a risk to include my email address as the agent in the delivery section for my party? 

Answer: Yes. 

If an agent’s email address is used, the agent becomes responsible to make sure the documents are timely forwarded and/or presented to the party. An agent’s acceptance of this role creates responsibilities on the part of the agent to make sure that notices and other documents received on behalf of a party are promptly and competently processed and forwarded to the party. The agent often must act swiftly because the party often is required to give a quick response to the other party. Arguably there may be liability when an agent does not timely process and deliver critical materials. The same risk exists now when a party asks an agent to use the agent’s fax number or address or to act as the party’s recipient for delivery. 

Question: Can I ignore federal law now? 

Answer: No. 

The laws still exist and therefore you still need to be concerned about electronic consent. This clarification offers some relief, but the federal law cannot be ignored. See the “Overview of the Law” box for more information.

Electronic consent cheat sheet

The WRA created a one-page cheat sheet that provides an overview of the federal e-sign law, how to meet the law's requirements and a handy chart about electronic consent. Download the PDF of the one-page cheat sheet at the link below.

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Download electronic consent cheat sheet >>

 

 

 

Resources

  • WRA e-commerce page: www.wra.org/ecommerce: The WRA's e-commerce page page offers articles, forms and other information created by WRA to assist you in understanding e-commerce issues. 
  • WRA LegalTalks videos: www.wra.org/LegalTalks: Watch for an upcoming LegalTalks video relating to this recent clarification! 

Cori Lamont is Director of Corporate and Regulatory Affairs for the WRA.

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