A must-see for real estate agents!
A thorough explanation of the key points regarding electronic contracts for real estate transactions!
Posted: May 2025, 4
Revision of the Real Estate Transactions Act
Due to recent amendments to the Real Estate Transaction Business Act, contract procedures for real estate transactions that were previously conducted on paper can now be handled electronically.
This marks a major turning point in the real estate industry to meet the needs of the times, such as improving operational efficiency and accommodating teleworking.
In this article, we will explain in detail the practical aspects and points to be aware of when digitizing "Important Information Explanation Sheets" and "Contracts"!
Purpose and intent of the amendment
The current amendment to the Real Estate Transactions Act is intended to promote DX (digital transformation) in real estate transactions.
Moving the contract process online is expected to increase the transparency and efficiency of transactions, and dramatically improve the convenience of real estate transactions.
Another factor behind this is the increased need for non-face-to-face contracts due to the impact of COVID-19.
Electronic contracts can now be used in real estate transactions!
Following legal changes in May 2022, electronic contracts are now officially recognized for a wide range of real estate transactions, including lease agreements and sales contracts.
This has created an environment in which contracting parties can smoothly conclude contracts regardless of location.
The introduction of electronic contracts reduces the hassle of storing and managing documents, contributing to improved business efficiency and promoting a paperless society.
However, if you do not understand the legal effects and operational rules, there is a risk of running into trouble, so you need to be careful.
What is an electronic contract?
An electronic contract is a method of contracting in which contract documents are created using electronic data rather than paper documents and agreement is indicated with an electronic signature.
Instead of signing and stamping paper contracts as in the past, signatures and authentication are done using cloud services and electronic signature tools.
Electronic contracts are recognized as having legal effect under multiple laws, such as the Electronic Signature Act and the Electronic Bookkeeping Act, and can be used as a formal means of contracting.
In the real estate industry, it is now possible to electronically deliver important information documents and contracts, which means that the entire transaction can be digitized, and this is expected to significantly improve efficiency.
Impact on important matters explanation
Digitization of documents
Until now, important information documents and contracts had to be provided in writing, but due to changes in the law, it is now possible to provide these documents as electronic data such as PDFs.
However, when delivering documents electronically, the consent of the other party must be obtained in advance, and an environment for verifying electronic data must be in place.
In addition, data must be provided in a format that prevents tampering and allows for long-term storage.
By meeting these requirements, it will be possible to provide important information that meets legal requirements even when delivered electronically.
Abolition of the obligation to affix a seal
Traditionally, in real estate transactions, there were many cases where a registered seal was required on contracts.
However, with the introduction of electronic contracts, the requirement to affix a seal to paper has in principle been abolished and has been replaced by an electronic signature.
Electronic signatures provide a certain level of security in terms of verifying identity and preventing tampering, and they have the same legal effect as paper signatures and seals.
This will allow contract procedures to be completed online, eliminating the need to hand over physical seals or send them by mail.
Points to note about electronic contracts
While electronic contracts are highly convenient, there are a few things to keep in mind when introducing them.
-It is necessary to introduce cloud services that support electronic signatures and establish operational systems.-In order to conclude an electronic contract, both contracting parties must have an environment that supports electronic contracts.
-Select a reliable authentication service to address risks such as contract tampering and impersonation.
-An appropriate storage system will be established based on the Electronic Bookkeeping Act.
-In order to prevent any problems arising from differences in IT literacy, we thoroughly confirm and explain things to our contracting partners in advance.
My Feelings, Then and Now
As real estate transactions become increasingly digitalized, "electronic contracts" are attracting a great deal of attention due to the 2022 amendment to the Real Estate Brokerage Act.
The introduction of electronic contracts brings many benefits, including improved business efficiency, cost reduction, and faster contract completion.
However, other important points include risk management associated with digitizing documents, compliance with laws and regulations, and consideration for the contracting parties.
Using the information provided in this article, we hope you will be able to resolve any questions or concerns you may have about the introduction of electronic contracts and enjoy safer, smoother real estate transactions.
(Author: Yamamoto Hano)
