The healthcare emergency situation has accelerated the digitisation of tasks and processes in a wide range of areas. Enforcement proceedings based on notarial deeds are no exception, where an electronic procedure became mandatory a few months ago. The only question is how long the signature itself will still need to be in writing.
What is a notarial deed good for?
The most important feature of a notarial deed is that it is directly enforceable. That is, if the obligor fails to perform its obligation under a notarial deed, the obligee may immediately request the enforcement of the obligation based on such document. In most cases, doing so helps to avoid a lengthy court procedure. Notarial deeds can be most commonly found in bank financing, where the bank requires the debtor to sign the loan agreement and the collateral agreements in a notarial deed as a condition of the loan. In addition, this format is also often preferred in commercial relations today. Thus for example, in the case of an appropriately worded statement included in a notarial deed, a landlord can expel a non-paying tenant from his or her property without litigation. But the legal position of a market participant is equally improved if its debtor acknowledges its debt in a statement made before a notary.
Notarial deed: from paper to electronic form
Like all documents, notarial deeds are traditionally drafted on paper. This is then signed by the parties before the notary, who keeps the document and provides certified copies thereof to the clients.
The first stage in the development of notarial deeds was when the notary could issue an electronic copy of the paper-based document. What this means is that the notary scanned the original document, affixed its electronic signature and time stamp to it and handed it over to the parties in the form of an e-file. More recently, however, it has also been possible for a notary to create the notarial deed in electronic form in the first place. This is subject to the condition that each of the signatories have an electronic signature and affix that to the statement instead of a handwritten signature. It should be noted, however, that this does not replace either the obligation to appear before the notary or the reading of the document, which often takes hours. So there is still room for improvement.
When enforcement also becomes electronic
The notarial deed fulfils its real function when the parties intend to enforce the claim based on it. In the past, this was only possible on paper: the interested party personally initiated the enforcement of the notarial deed before the notary by presenting it (together with the necessary annexes).
However, from 1 April this year, the situation has changed. Entities subject to electronic communication (i.e. companies, public bodies and their legal representatives) can now only initiate enforcement proceedings by submitting an online application. In addition, they must also submit the documents on which enforcement is based (such as the notarial deed in question) in authentic electronic form. That is, if someone does not possess an electronic copy of the document (or did not sign the notarial deed electronically), then he or she must first request that the authentic instrument be digitised and only then can initiate enforcement. This provision will encourage business entities to get their notarial deed issued electronically in the first place or to request an electronic copy immediately.
What is there to come?
The quarantine has given a big boost to the spread of digital and online solutions in all aspects of life. Linking enforcement procedures to electronic form further strengthens this process. Therefore, market operators (such as banks, financial companies, but sooner or later also individuals) should consider if the actual physical signature of their documents is still viable in the long run. At the end of this process actual hand-signed documents will be a real relic.
By Boglarka Zsibrita, Attorney at Law, Jalsovszky
