Electronic signatures are the new normal in most corporate transactions. With physical distancing, gathering restrictions and many working remotely, electronic signatures make it easy for business to continue as usual, including at condominiums.
Meeting minutes, status certificates, proxies and requisitions, etc. may all be signed electronically.
But what is an electronic signature and when is it valid?
Here’s the current framework governing electronic signatures in Ontario.
An “electronic signature” is broadly defined in Ontario’s Electronic Commerce Act (the “ECA”) as “electronic information that a person creates or adopts in order to sign a document and that is in, attached to or associated with the document.” The term is similarly defined in the federal statute, the Personal Information Protection and Electronic Documents Act.
Given the generic definition of “electronic signatures”, a document can contain a valid signature for the transaction of business in many ways. For example:
• A scanned copy of a document that was physically signed by a person;
• A typed name;
• A digital signature, like a digitized copy of a handwritten signature, pasted to an electronic document;
• An electronic drawing of a signature like one made by using a finger or stylus on a touchscreen; or
• A unique passcode created using public-key encryption technology.
Electronic signatures will typically qualify as a valid signature unless a “wet ink” or handwritten signature is required by a specific law (or agreement).
There are limited statutory requirements to ensure an electronic signature is valid. Section 11 of the ECA provides that “a legal requirement that a document be signed is satisfied by an electronic signature”. The section further stipulates “reliability requirements” that (a) the electronic signature should be reliable for the purpose of identifying the person signing and (b) the association of the electronic signature with the relevant document should be reliable, but only for prescribed documents (of which there are currently none). So, in practice, most existing forms of electronic signatures will satisfy the basic reliability requirements.
There are, however, a few circumstances where electronic signatures cannot be used, like to execute a will or power of attorney.
In the condo context, the Condo Act and the regulations are silent on electronic signatures. Likewise, none of the prescribed forms mention electronic signatures.
Electronic signatures are referred to in an optional document on the Condominium Authority of Ontario website for the “owner requisitioned meeting template”, which simply provides that electronic signatures may be used to sign a requisition if the signatures meet the requirements of section 11 of the ECA (as discussed above).
Bill 190, COVID-19 Response and Reforms to Modernize Ontario Act was enacted May 2020 to enable corporations, including condos, to continue operations during the pandemic. New regimes were enacted for the electronic execution and electronic filing of documents for other business corporations but not for condo corporations. The Condo Act was temporarily amended by Bill 190 to permit condos to conduct business, such as allowing the Board of Directors and owners’ meetings to be held virtually, electronic voting and service by electronic means, all without a by-law, but there were no amendments with respect to electronic execution of documents. Therefore, the above-described framework is applicable for Condo Act purposes – if a document must be signed, and it is signed or contains an electronic signature in accordance with the ECA, that signature is valid.
Of course, condos should check whether there are any requirements or limitations on electronic signatures in the declaration, by-laws or rules since compliance with these governing documents is mandatory under the Condo Act.
Signing off electronically,