The digitalisation of the deed of sale

The deed of sale is an essential moment when buying or selling a property. He signs the transfer of ownership between two parties, in the presence of a notary. This signature is only made in the presence of the persons concerned, or their representatives if they cannot travel. The signing of the deeds of sale came to an abrupt halt following the general containment order to limit the spread of COVID-19, which appeared in late 2019. This is how real estate has had its transactions blocked, because it cannot finalize the procedures.

Real estate sales, a sector with broken growth

According to the notarial website, the growth of transactions was promising throughout the country. In the early days of the virus, from late 2019 to early 2020, this growth was in double digits (up 11%). A promising and more than encouraging result, despite the increase in prices seen throughout France. The containment of all The French changed the situation immediately, freezing real estate activity overnight. First impacted, real estate agents and notaries could not adapt to offer alternatives to their clients. Although notaries remained mobilized to answer their clients’ questions, the signing of new deeds of sale was not possible.

However, this changed on 3 April 2020, after the vote and the publication of a decree which suggests a gradual unblocking of the situation. Indeed, Decree 2020-395 allows the establishment of a derogatory regime for the establishment of notarial acts on electronic media. In other words, it is no longer necessary for the notary and the parties to sign a deed of sale in person.

This allows all pending files to be put back on the agenda until a solution is found. For real estate agents, this also means unlocking transactions and thus resuming their activity. The Decree is therefore valid up to one month after the end of the health emergency, currently set for 24 July 2020. However, this will not apply to the creation of new records for sale. Indeed, some structures issuing documents essential to conclude a sale are in reduced activity.

A recovery in real estate sales uncertain

The implementation of Decree 2020-395 makes it possible to smooth out all real estate transactions in order to foresee a resumption of activity. Real estate professionals and notaries already know that it will be long. But above all, the way out of this crisis and its consequences on the market remain uncertain. Indeed, in a context that evolves on a day-to-day basis, it is impossible to accurately predict changes over time. While the current situation suggests a difficult economic period for many sectors, it is difficult to quantify its impact.

In the short term, already, the resumption of real estate and notarial activity should make up for the accumulated “delay”. This would result in the completion of the various transactions already undertaken. On the other hand, the dynamics of this recovery remain uncertain. This would depend above all on the takeover of the various players involved in the creation of a sales file. Another factor, and not least, is the possibility for individuals to move, for the time being still put in brackets.

Nevertheless, the rebound following this long pause in activity will not catch up. A tense workflow is coming up, but does not portend a growth in activity for many months. The notarial news site indicates that transaction volume would remain low until the end of the summer at a minimum. It is also possible that the French will turn to new dwellings with more space, or a garden. It seems plausible to see this kind of demand increase significantly over time. In the face of increased demands, the conditions for access to credit could be tightened, only to focus on the strongest files.

The digitalization of the deed of sale, towards a follow-up of the acts facilitated?

The use of digital technology in management within a company has shown its strengths in many industries. It allows for remote management of files, making the transmission of information more fluid and faster. As a result, real estate developers are turning to the use of CRM to track all current cases. They can send the documents to the parties, the notary, and all stakeholders in completing a file. This makes the total management time faster, easier and allows documents to be signed at any time. In the notarial sector, official documents were usually systematically signed in person.

Few notarial studies offer the signature of documents remotely. The ones that offer it are usually studies with international clients for which it is difficult to get around. But in the wake of this unprecedented episode, is it possible that studies will also turn to a total digitalization of acts? It seems highly unlikely that this will become more widespread beyond the time allowed by the Order. Indeed, the signing of official documents raises concepts such as data security. This is a very important point, given the impact of the signing of certain documents.

Many individuals say they prefer to wait a little after de-disconfinement before starting their move. Indeed, they want to be able to move in good conditions. Allowing the signature of remote sales deeds helps unlock many files that could not be closed. A decision appreciated by real estate professionals and notaries who can smooth out the accumulated work. Although the future still seems uncertain, the real estate sector is trying to look forward to tomorrow.

Sources:

Electronic signing of a deed of sale: a digitalisation to smooth out current transactions – Agency Edifice – 7 April 2020

Decree 2020-395 of April 3, 2020 authorizing the remote notarized deed during the health emergency period

Real estate market: trend and evolution of house prices – Notaires.fr – 20 April 2020

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