Closing the Loop The importance of document management in online leasing and electronic signatures

Megan Smale, Esq. Corporate Counsel RealPage, Inc.

Megan Smale, Esq.

Corporate Counsel

RealPage, Inc.

Electronic Signatures

Electronic Signatures

eSignature Allows property managers to accept and execute legally binding electronic leases and other documents When combined with document management, it satisfies the most stringent state and federal requirements necessary to ensure that an electronically executed lease is both binding and enforceable anywhere in the United States

Allows property managers to accept and execute legally binding electronic leases and other documents

When combined with document management, it satisfies the most stringent state and federal requirements necessary to ensure that an electronically executed lease is both binding and enforceable anywhere in the United States

Why eSignature Technology trend in other industries SEC—Securities Filings Google, Inc. 10 K Annual Report Reported $16.9 billion in top line revenue Electronically filed using EDGAR, the SEC online filing system Eric Schmidt, Chairman and CEO, eSigned to certify the report

Technology trend in other industries

SEC—Securities Filings

Google, Inc. 10 K Annual Report

Reported $16.9 billion in top line revenue

Electronically filed using EDGAR, the SEC online filing system

Eric Schmidt, Chairman and CEO, eSigned to certify the report

Why eSignature Technology trend in other industries Federal and State Court Filings Federal courts use Electronic Case Filing (“ECF”) and pleadings are accessible on PACER, Public Access Court Electronic Records ECF filings use eSignatures Vioxx class action suit, which settled for $4.85 billion, was an ECF case

Technology trend in other industries

Federal and State Court Filings

Federal courts use Electronic Case Filing (“ECF”) and pleadings are accessible on PACER, Public Access Court Electronic Records

ECF filings use eSignatures

Vioxx class action suit, which settled for $4.85 billion, was an ECF case

Why eSignature Technology trend in other industries Truth in Lending Act, Regulation Z – Federally required disclosures for home equity loans, credit cards, variable rate mortgages, and others may be delivered electronically Department of Education – Paperless financial aid using a PIN. The e-sign on the FAFSA page uses Secure Sockets Layer encryption to protect the student’s confidential information. Smart cards can also be used to effect an electronic signature

Technology trend in other industries

Truth in Lending Act, Regulation Z – Federally required disclosures for home equity loans, credit cards, variable rate mortgages, and others may be delivered electronically

Department of Education – Paperless financial aid using a PIN. The e-sign on the FAFSA page uses Secure Sockets Layer encryption to protect the student’s confidential information. Smart cards can also be used to effect an electronic signature

Why eSignature Technology trend in other industries It’s what the industry wants RealPage clients demanding this technology to be competitive Camden recently completed first lead-to-lease completely online

Technology trend in other industries

It’s what the industry wants

RealPage clients demanding this technology to be competitive

Camden recently completed first lead-to-lease completely online

Why eSignature Technology trend in other industries It’s what the industry wants It’s what your customers want More people are self-service oriented Generation Y does everything online All generations getting comfortable transacting over the web

Technology trend in other industries

It’s what the industry wants

It’s what your customers want

More people are self-service oriented

Generation Y does everything online

All generations getting comfortable transacting over the web

Why eSignature Technology trend in other industries It’s what the industry wants It’s what your customers want Go green Prius outsold the iconic Ford Explorer in 2007 Environmentally friendly products and processes are fashionable

Technology trend in other industries

It’s what the industry wants

It’s what your customers want

Go green

Prius outsold the iconic Ford Explorer in 2007

Environmentally friendly products and processes are fashionable

History of eSignature FEDERAL: The Electronic Signatures in Global and National Commerce Act (E-Sign), 15 U.S.C. § 7001 et seq. STATE: State-enacted versions of the Uniform Electronic Transactions Act (UETA)

FEDERAL:

The Electronic Signatures in Global and National Commerce Act (E-Sign), 15 U.S.C. § 7001 et seq.

STATE:

State-enacted versions of the Uniform Electronic Transactions Act (UETA)

History of eSignature E-Sign Act Overview Enacted by Congress on June 30, 2000 Ensures validity and legal effect of contracts entered into electronically Electronic leases are fully enforceable

E-Sign Act Overview

Enacted by Congress on June 30, 2000

Ensures validity and legal effect of contracts entered into electronically

Electronic leases are fully enforceable

History of eSignature Upon signing the bill into law, President Clinton stated, “Under this landmark legislation … online contracts will now have the same legal force as equivalent paper contracts.” Statement by President William J. Clinton Upon Signing H.R. 2130, 36 Weekly Comp. Pres. Doc. 1560 (June 30, 2000)

Upon signing the bill into law, President Clinton stated,

“Under this landmark legislation … online contracts will now have the same legal force as equivalent paper contracts.”

Statement by President William J. Clinton Upon Signing H.R. 2130, 36 Weekly Comp. Pres. Doc. 1560 (June 30, 2000)

History of eSignature A record or signature may not be denied legal effect or enforceability solely because it is in electronic form A contract may not be denied legal effect or enforceability solely because an electronic record was used in its formation If a law requires a record to be in writing, an electronic record satisfies the law If a law requires a signature, an electronic signature satisfies the law

A record or signature may not be denied legal effect or enforceability solely because it is in electronic form

A contract may not be denied legal effect or enforceability solely because an electronic record was used in its formation

If a law requires a record to be in writing, an electronic record satisfies the law

If a law requires a signature, an electronic signature satisfies the law

eSignature Laws Requirements Technological capacity Non-repudiation Signer authentication Document authentication Document integrity Record retention

Technological capacity

Non-repudiation

Signer authentication

Document authentication

Document integrity

Record retention

eSignature Laws Requirements Technological Capacity Computer Access to the Internet Adobe Acrobat Reader

Technological Capacity

Computer

Access to the Internet

Adobe Acrobat Reader

eSignature Laws Requirements Non-Repudiation Electronic signer must expressly consent to electronic execution or Signer must exhibit willful action Consent by clicking “sign document” and entering password for each transaction

Non-Repudiation

Electronic signer must expressly consent to electronic execution or

Signer must exhibit willful action

Consent by clicking “sign document” and entering password for each transaction

eSignature Laws Requirements Signer Authentication Evidence attributing signature to signer Prospect creates online username and password

Signer Authentication

Evidence attributing signature to signer

Prospect creates online username and password

eSignature Laws Requirements Document Authentication Document fingerprint Unique ESA ID

Document Authentication

Document fingerprint

Unique ESA ID

eSignature Laws Requirements Document Integrity Evidence that document has not been altered Prospect clicks “sign now” button and enters password, creating unique ESA ID Document goes to document management system for signature and archiving

Document Integrity

Evidence that document has not been altered

Prospect clicks “sign now” button and enters password, creating unique ESA ID

Document goes to document management system for signature and archiving

eSignature Laws Requirements Record Retention ESA seal placed on executed lease Document stored for seven years

Record Retention

ESA seal placed on executed lease

Document stored for seven years

Defending eSignatures Defending a Challenged Electronic Lease The same rules for admitting an ink-signed lease apply to an eSigned lease – it must be “authenticated” Each state has similar rules of civil procedure and evidence Texas Rule of Evidence 902(11) defines electronic leases and eSignatures as “self-authenticating”

Defending a Challenged Electronic Lease

The same rules for admitting an ink-signed lease apply to an eSigned lease – it must be “authenticated”

Each state has similar rules of civil procedure and evidence

Texas Rule of Evidence 902(11) defines electronic leases and eSignatures as “self-authenticating”

eSignatures in the Multifamily Industry

Typical Online Leasing Life Cycle

eSignature Closes the Loop

The eSignature Process Applicant creates online account Locked PDF forms are presented for review Applicant enters portal account password Applicant clicks the “sign now” button Locked PDF transmitted to secure document management system for signature Locked and signed PDF presented to applicant with ESA seal

Applicant creates online account

Locked PDF forms are presented for review

Applicant enters portal account password

Applicant clicks the “sign now” button

Locked PDF transmitted to secure document management system for signature

Locked and signed PDF presented to applicant with ESA seal

eSignature Security Federal Government grade security CAS Technology protects “fixed content” information, i.e., content that is not intended to be and should not be revised Documents are non-rewritable and non-erasable

Federal Government grade security

CAS Technology protects “fixed content” information, i.e., content that is not intended to be and should not be revised

Documents are non-rewritable and non-erasable

eSignature Benefits True online leasing experience—no printing Allows renters to do business on their terms Allows you to go green Printing lease no longer necessary Resident uses resident portal to access executed documents stored in document management system

True online leasing experience—no printing

Allows renters to do business on their terms

Allows you to go green

Printing lease no longer necessary

Resident uses resident portal to access executed documents stored in document management system

eSignature Benefits

eSignature is the holy grail of the online leasing process. A document management system makes it happen.

eSignature is the holy grail of the online leasing process.

A document management system makes it happen.

Questions?