Whether it’s hiring a hire car or making a purchase in an online shop: These days, most transactions are conducted completely digitally via the Internet – to the benefit of all parties.

However, the situation is different when it comes to letting properties. This is because most rental agreements are still signed with pen and paper, resulting in higher costs and longer waiting times, especially for landlords.

The solution: sign the tenancy agreement digitally. But is this legally possible? We explain what you need to bear in mind.

These are the advantages of digital signatures for rental agreements

If a tenancy agreement is signed “wet”, i.e. with pen on paper, this generates a great deal of effort on both sides:

  • The rental agreement must be available in paper form to all signatories, which requires either sending it by post or travelling to a signing location
  • The rental agreement must then be “back-digitised” in the landlord’s system, so to speak
  • The original rental agreement document must be archived in paper form
  • The longer waiting times extend the vacancy period during which no turnover is generated with a property
  • Tenants cannot be identified beyond doubt

All of these points generate fixed costs for landlords, which are incurred for each letting process per property. If a large number of properties are let per time unit, the effort involved in managing the documents alone can generate significant personnel costs.

In the case of a lack of identification, risks arise at the same time, because if a tenant conceals their identity or pretends to be someone else, this usually generates a very high administrative burden for landlords, while at the same time there is often a lack of income from the rental property.

Digital signatures for rental agreements, on the other hand, have several tangible advantages for both tenants and landlords:

  • You reduce waiting and vacancy times by enabling contracts to be concluded immediately online
  • You avoid a media disruption that significantly improves the user experience for tenants, attracting new potential tenants to your platform
  • They reduce costs on the landlord side, for example when processing documents, but also indirectly, as vacancies are reduced. This can sometimes save up to 47 euros per contract
  • They enable tenants to be identified beyond doubt

All in all, digital signatures for rental agreements only have advantages for all sides – provided that legal provisions for legal validity and data protection are complied with.

We report in more detail on the advantages of digital signatures in the property sector in the linked blog post.

Legal validity of electronic signatures for rental agreements

Electronic signatures have been recognised and legally valid for most areas of application in Europe since the adoption of the Regulation on Electronic Identification, Authentication and Trust Services (eIDAS) in the EU and the Federal Act on Electronic Signatures (ZertES) in Switzerland.

“Simple” and “qualified” electronic signatures

However, not all electronic signatures are the same, as there are various standards with different technical requirements and areas of application.

If there is no legal formal requirement for a particular document or contract, the so-called “Simple Electronic Signature”, EES or SES for short, is sufficient in most cases. In this case, the signatories are usually only identified via the e-mail address.

This is to be distinguished from the “qualified electronic signature”, or QES for short, which in contrast is subject to strict formal and security criteria and is mandatory in some applications for electronic signing as an alternative to a classic, “wet” signature.

A QES always requires secure identification of the signatories, which is done via video identification services, for example, where the personal details of users are checked.

Which use cases are informal and which require a QES are regulated differently in Germany and Switzerland, for example. We have therefore summarised the various standards on the legal validity of digital signatures for rental agreements for you.

Note: The following lists are only intended as an overview and do not contain all possible applications. We endeavour to keep the information up to date, but cannot always guarantee this due to rapidly changing legal conditions. You can find out more about the legal validity of eSignatures in general on the linked page.

Legal validity of digital signatures in Germany

Cases in which a Simple Electronic Signature (EES or SES) is sufficient, among others:

  • Open-ended tenancy agreements with constant rent
  • Handover reports (incl. meter readings and damage documentation etc.)
  • Service charge settlements
  • Cancellations (if the property is not residential)
  • Rent adjustment letter
  • Master data sheets and changes
  • Tenant self-disclosure and self-disclosure by prospective tenants

Cases in which a Qualified Electronic Signature (QES) is required for electronic signatures, among others:

  • Fixed-term tenancy agreements
  • Residential leases with index-linked or graduated rent
  • Cancellations of residential leases
  • Significant changes to fixed-term rental agreements
  • Exercising a statutory right of first refusal for tenants
  • SEPA mandates

Only for signing a rental guarantee is an electronic signature still not possible as an alternative in Germany.

In all other cases mentioned above, the digital signature is legally valid and legally recognised in Germany – provided that any existing formal requirements are met and the electronic signature fulfils the requirements of the eIDAS Directive.

Legal validity of digital signatures in Switzerland

Cases in which a Simple Electronic Signature (EES or SES) is sufficient, among others:

  • Any rental agreements (including fixed-term or with index-linked or graduated rent)
  • Handover reports (incl. meter readings and damage documentation etc.)
  • Service charge settlements
  • Tenant self-disclosure and self-disclosure by prospective tenants

Cases in which a Qualified Electronic Signature (QES) is required for electronic signatures, among others:

  • Cancellation of rental agreements (for both residential and commercial premises)
  • Warnings, for example due to late payment or breach of duty.

The following also applies here: In all of the above cases, the digital signature is legally valid and legally recognised in Switzerland – provided that any existing formal requirements are met and the electronic signature fulfils the requirements of the ZertES Directive.

Digital rental agreement signatures with any signature standard

Digital signatures are legally valid for rental agreements in most cases and are recognised by law.

In many cases, legislation permits the use of the Simple Electronic Signature (SES). Certifaction offers every type of signature, from SES and AES to Qualified Electronic Signature (QES) in accordance with eIDAS and ZertES standards, so that you are equipped for all use cases in which an electronic signature is permitted.

All of this is available from us in an easy-to-integrate app that fulfils the highest data protection requirements and even has a solution for you with the “digital twin” if you want to authenticate printed rental contracts beyond doubt.

Test Certifaction free of charge