Andrea F. Nuciforo
Bill sponsor

Bay State legislators may not be known for acting quickly, but their approval of the Uniform Electronic Transaction Act could greatly speed real estate transactions in Massachusetts.

The legislation would pave the way for use of electronic signatures in Massachusetts, a practice already cleared at the federal level. Among the expected benefits to electronic commerce, the measure would likely make a variety of real estate transactions speedier and more efficient.

In 2000, the federal e-signature bill was passed and signed by President Clinton, allowing for the validity of electronic signatures with all interstate real estate transactions. According to Sen. Andrea F. Nuciforo of Pittsfield, implementing the UETA would allow the same validation for in-state transactions and would give state courts jurisdiction over any disputes that arise over the legitimacy of electronic signatures.

Nuciforo, a sponsor of the measure, was one of the speakers at a recent breakfast forum on the UETA hosted by Donald E. Ashe, register of deeds for Hampden County.

The UETA is currently pending before the Massachusetts Legislature through two bills, S. 1803, sponsored by Sen. David P. Magnani of Framingham, and S. 1805, sponsored by Nuciforo.

“It’s easy to understand why this is important in the electronic age because of the amount of paper that can be used otherwise and the cost and inefficiency associated with that,” said Nuciforo. “What electronic commerce permits is that it allows us to have the actual signature taking place in electronic form. It also allows for documents to be recorded electronically,” an ability that could greatly benefit the state’s registries of deeds, he said.

Under S. 1803, said Magnani, the minimal consumer protections provided under the federal bill would be extended to more effectively prevent fraud.

Ashe said the breakfast, attended by 11 legislators and four representatives of various registries in Massachusetts, was part of the Hampden County Registry’s plan to bring legislators interested in passing the UETA together with those who would implement the bill, including Realtors, bankers and attorneys. Passage of one of the bills is inevitable, he said.

“There are two bills pending, so this is the time to make everyone aware that something is coming,” said Ashe. “We’re on the highway of technology without any rest stops, so it’s full speed ahead.”

Ashe added that although Hampden County is one of the more technologically advanced registries in Massachusetts, if the UETA were passed now, many Massachusetts registries would be unable to make use of the potential benefits because the computer hardware and software necessary to make the change is lacking. Along with Hampden County, Ashe said, Essex and Barnstable are examples of other counties that potentially could make the leap to performing electronic transactions – recording of deeds – fairly easily and quickly.

“There are a handful of registries that right now, with a few tweaks here and there, could adapt themselves to do it and another handful that need all new computer systems,” said Ashe.

Ashe, who has been the register since 1983, said that one of his goals has been to help Hampden County remain on the cutting edge of technology and better serve the people who use the registry.

To help registries adapt for electronic transactions, said Ashe, a standard, statewide surcharge that would be dedicated strictly toward technology could be added to the fee for every document.

Finding a Format

Arthur R. Gaudio, dean of Western New England College of Law in Springfield who spoke at the breakfast and helped develop similar legislation for the state of Iowa, said that while both bills are proactive statutes, both have excluded necessary information about a uniform type of electronic signature to be accepted by the state.

“[Two people] can have whatever contract they want and it can be perfectly valid between them, but if they want to record it with the state, they’re going to have to use a certain format,” said Gaudio.

Michael Agen, manager and title counsel for the Western Massachusetts branch of the Connecticut Attorneys Title Insurance Co. in Springfield, also spoke at the breakfast. “The biggest question we have is making sure that the commonwealth enacts a set of regulations that protects consumer security, eliminates fraud as much as possible to a level that is more secure than with paper [transactions] right now,” he said.

Agen added that the regulations must be uniformly applicable throughout Massachusetts and not only fit the requirements of the lending community, but also be adaptable to the requirements of the legal community.

Performing the transition in stages, said Agen, would allow banks and law offices to invest only a modest amount of time and money to begin electronically sending certain supplementary documents, including mortgage assignments and discharges, to registries. By doing this, the complete transition to electronic recordation could be completed in about three to four years.

Both Agen and Gaudio recommended organizing a statewide task force to assess the needs for implementing the legislation once it is passed. “The idea was, let’s get a committee together to see what direction we should go before we invest way too much money in a technology that won’t fit in with all the aims of this bill,” said Agen.

Edward Moore, president of the Greater Springfield Association of Realtors in Springfield, said that prior to attending the breakfast he was not aware of potential challenges of introducing the electronic signature technology at registries throughout the state but believes that it will still occur regardless.

“Like all technology, it’s going to be forthcoming,” said Moore. “It’s probably going to be helpful for out-of-town [home]buyers and sellers when they need instant communication in a very fast-moving market.”

Electronic Transaction Act Holds Promise for Registries

by Banker & Tradesman time to read: 4 min