Law Times

Law Times • January 14, 2013 Page 11 FOCUS MPPs seeking to revive electronic signatures bill Private member's legislation would provide protections in real estate matters BY MARG. BRUINEMAN For Law Times W hen Premier Dalton McGuinty announced his resignation and prorogued the legislature last fall, everything that had been lying on the order table immediately fell off. Among the proposed legislation that died was a private member's bill allowing for electronic signatures in real estate transactions. Bill 96, co-sponsored by Conservative MPP Todd Smith and Liberal Yasir Naqvi, was a motion to modernize Ontario's Electronic Commerce Act by removing the exception referring to land transfer documents. The Electronic Commerce Act, passed in 2000, provides protection for a variety of transactions. But at the time it took effect, there wasn't enough confidence in the technology to cover what's ultimately the largest purchase for most people: their homes. Before his election as MPP for Ottawa Centre, Naqvi practised federal regulatory matters, international trade, and corporate law and taught law at the University of Ottawa. He says he'll continue to push for the legislation given the need in the marketplace. "We strongly feel that the exception . . . should be removed," he says. "Twelve years later, now that electronic commerce and electronic signing are a common thing in life, people are more sophisticated. We didn't hear much opposition, but for sure, we've got to make sure there's no loose ends." There's real motivation from the real estate industry, which has been working with the MPPs and the provincial attorney general's office to make the changes to the bill despite this initial setback. The legislation would allow the use of electronic agreements of purchase and sale. The premise is that increased availability of technology allows savings of time and money for real estate agents and those involved in transactions. According to the Ontario Real Estate Association, the proposal would allow access to agreements of purchase and sale through a central portal. The U.S. real estate industry already uses the technology supporting electronic agreements of purchase. The process, while handy and available through an Internet connection from anywhere in the world, isn't in widespread use in Ontario because the real estate industry is exempt from protection under the Electronic Commerce Act. Bill 96 received just one reading on May 17. Matthew Thornton has been working with the MPPs and provincial representatives as assistant director of government relations with the Ontario Real Estate Association. He hopes electronic transactions will eventually be available for the real estate sector. "It would make transactions more efficient," he says. "You're expediting transactions, making them easier. It's very common in the United States . . . widely used by our realtor cousins in the south." There's now a comfort level that didn't exist when the original legislation took effect and the technology is now widespread, he adds. But some lawyers argue it isn't so simple. Real estate lawyer Lisa Laredo, for example, notes a regime for electronic registration already exists. The area the proposed bill would cover is agreements of purchase and sale. It would also deal with agreements There's uncertainty around the reliability of electronic signatures, says Lisa Laredo. that create an interest in real estate such as an agreement to lease. "There is uncertainty in this area because the electronic signatures of both parties must be reliable and there must be a reliable association of the electronic signature with the electronic document," she says. "We do not know what reliable means. In addition, most people do not have electronic signatures and would not know how to create one." She suggests people won't universally embrace the transition to electronic transactions, particularly at the outset, and doesn't believe they'll reduce the amount of paper generated. She expects people will continue to use paper signatures as additional safeguards. "Until there are standards to assess the reliability of an electronic signature and its association with the document intended to be signed and given the limited impact of electronic commerce legislation in the area of real estate, I believe the legislation not to be passed in its present form was the right one." Laredo would like to see restrictions to the language to make it compatible with the current system of electronic registration along with a clear definition of what's reasonable. The Ontario attorney general's office has been examining the situation since the bill died on Oct. 15. "Our ministry is currently looking at a proposal from the Ontario Real Estate Association and some large technology enterprises to remove the exclusion of land transfer documents from the Electronic Commerce Act," said Ministry of the Attorney General spokesman Jason Gennaro. He noted the government has been working with all of those who have a stake in the legislation and is responding to the criticism. But ultimately, any amendments to the act would have to go to the legislature for approval. LT The title insurer that puts you front row, centre Putting the legal community front and centre has made us the #1 choice with Canadian lawyers for over a decade. While other title insurers go head to head with you for your business, Stewart Title does not support programs that reduce or eliminate the lawyer's role in real estate transactions. Instead, we focus on what matters to you: • unsurpassed policy coverage • competitive pricing • underwriting expertise At Stewart Title, we keep real estate transactions where they belong – in your office! 1-888-667-5151 or www.stewart.ca ON Untitled-3 1 www.lawtimesnews.com 6/3/11 11:24:18 AM

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