Can my tenants sign the lease electronically?

In our article for 17 October 2022 titled, “3 KEY STEPS to Safeguard Your Commercial Property”, one of the most important things we highlighted for you to do to keep your retail, industrial or office property safe was … have your tenants SIGN A LEASE!

This is a very important step and one that should not be ignored.

With the busy-ness of life, though, it is easy to neglect, especially the signing aspect. For example, you may go to the extent of using a pro-forma lease that you have downloaded from the internet, agree its terms with the tenant, but then simply get too busy to have it signed. When things go pear-shaped, how do you prove that the terms were actually agreed to?

While agreement can be shown by other means – emails, notes of discussions on the telephone, meetings held – it is MUCH easier if the document is simply signed. Even if you don’t take it to the next step of having the lease registered on the title, a signed document puts you in a strong position.

So, how do you achieve this? Clearly, the simplest way is for you and your tenant to come together in person and physically sign the document. However, it is of course 2022 and there are now other ways of doing this given the challenges that arise from distance, the pandemic and the simple speed of doing business. Notably, many documents can now be signed electronically.

It is important, then, to understand what law applies in the Northern Territory. This is governed by the Electronic Transactions (Northern Territory) Act 2000 and associated Regulations from 2001. Broadly, this law provides that a transaction is not invalid because it took place by means of one or more electronic communications. It defines a transaction to include something that is in the nature of a contract, agreement or other arrangement and a transaction of a non-commercial nature.

The only transactions which are clearly stated to be exempted are the following:

1)    A disposition of property by Will

2)    Revocation of a Will

3)    The creation or revocation of a power of attorney

If you are an interstate property owner, then, or simply struggling to find the time to meet with a prospective tenant, the law clearly provides that a lease can be signed electronically.

This can also apply when it comes to signing the panel form required by the Land Titles Office for registration of that lease, provided that you are signing on behalf of a company and follow the steps required by the Corporations Act 2001 (Cth). If simply signing as an individual, then electronic signing will not be permitted and the panel form will still need to be signed physically.

So, if you are looking to streamline your property management procedures, then look very carefully at electronic signing. There is no question that we will see more of it as time goes on.

Have a query about the process to complete a lease? Please call Peter Walker or Samantha Hansen on (08) 8941 6355 or email peter@bowden-mccormack.com.au or sam@bowden-mccormack.com.au.

For the buying or selling of any property, please call us on (08) 8941 6355 or email conveyancer@bowden-mccormack.com.au or hannah@bowden-mccormack.com.au.