Should Real Estate Contracts Allow Notices By Email?

Leases and other real estate documents typically include a short paragraph saying that if either party wants to give a formal notice of anything (such as a default or the exercise of an option), that notice must be given in a certain way – typically by hand, by certified mail, or by FedEx or similar service. And it must be sent to certain addresses. A notice that doesn’t comply might not be valid.

In 2021, most ordinary business communications take place by email. Is it time for contracts and leases to allow formal notices by email? If you ask a lawyer who spends time in court litigating over disputes, the answer will often be no. A litigator will worry that email notices create too many issues about whether they were actually sent or actually received.

It’s still true that most communications take place by email. That’s how most people expect to communicate in 2021. And if a particular notice must be given, if at all, by a certain date, then email might be the very best way to give that notice. It avoids a frantic scramble to send a FedEx package or hand delivery a day or two before the notice deadline.

Contracts ought to allow formal notices under legal documents to be given by email. And many people in real estate and their attorneys are trying to figure out how to do that, especially for notices that might have to be given just before a deadline.

As one simple solution, some contracts say an email notice will become effective as soon as it’s sent, provided that the sender dispatches a paper copy of the email by overnight delivery within the next business day or so, even if it’s sent or received after the actual notice deadline. That arrangement may create a little bit of uncertainty for a while at the receiving end, but not much, and it seems tolerable.

Some contracts say notices by email must be given from a specified email address and must contain some magic language in the subject line, to try to assure that the recipient sees the message and realizes its importance.

Other contracts require that email notices go to multiple specified addresses with a request that the recipients acknowledge receipt. The notice becomes effective only when a certain number of recipients acknowledge receipt. If that doesn’t happen quickly, then the notice sender can pick up the telephone to try to make it happen, or can send the notice by some other means. This process helps assure an email notice will actually be received and taken seriously, but it doesn’t solve any problems when an email notice must be given before a certain deadline.

Since any contractual relationship is likely to spawn a vast volume of email communications, the parties might worry that one of those emails might be deemed (or not deemed) a formal notice when it was intended not to be (or to be) a formal notice. As one way to assure that email notices are recognized as such and taken seriously, perhaps the contract should require that formal notices given by email must consist of an email attachment with the actual notice itself, including a signature. Any other email communications are just chitchat.

Measures like these should help make email notices practical, reliable, and safe. They would also help bring real estate documents into the 21st Century.

If these measures are not enough, perhaps there is a business opportunity for someone to create a third party service to receive copies of email notices and then confirm that the notices were actually sent and received. If any uncertainty existed about receipt of an email, that service could take specified extra measures to make sure the recipient actually received the email notice, such as picking up the telephone and telling the recipient to read the incoming notice, then making sure the recipient actually did that. The use of such a trusted third-party service ought to eliminate issues of proof and any concerns at all about the wisdom and practicality of giving notices by email.

One way or another, it’s probably about time for real estate contracts to catch up with modern communications techniques.

Source: https://www.forbes.com/sites/joshuastein/2021/02/23/should-real-estate-contracts-allow-notices-by-email/