10 Things You Should Know About Electronic Signatures, Transmission and Storage

Since May 2020, the U.S. Department of Housing and Urban Development (HUD) Office of Asset Management and Portfolio Oversight (OAMPO) in the Office of Multifamily Housing Programs has granted the option to use electronic signatures and to electronically transmit and electronically store files. That decision has led to far greater overall efficiencies and cost savings for industry operators who choose the option

Why Are Electronic Signatures, Transmission and Storage Important to Our Industry?

Electronic signatures have greatly streamlined the application and leasing process for tenants and property teams. They eliminate the delay associated with finding a meeting time that works for both the prospective tenant and the onsite team. They reduce the amount of traffic coming into the leasing office, allowing the site staff to focus on other tasks. They have also systematized the application process which produces electronic timestamps to secure positions on waitlists, minimizing the opportunity for discrimination or bias.

Eliminating the need to store paper documents has helped operators save money and reduce risk. Digital storage is a fraction of the cost of physical storage (in some systems it’s actually free!), and operators also save on expenses incurred with printing, filing, retention and retrieval. By replacing physical document storage with secure, encrypted electronic documents, operators are no longer exposed to risks such as loss from fires and floods. These documents can be retrieved by authorized users anytime from anywhere that has an internet connection. They’re protected from loss or unauthorized access through a National Institute of Standards and Technology (NIST)-compliant encryption system, which also comes with security benefits such as automatic backup, access control, and change tracking. Removing the need for paper storage means documents are no longer prone to human errors such as misplacement, misfiling, damage, loss or destruction. Finally, digital files are truly “green” – no more killing trees to print 30+ page certification packets.

In spite of all these great benefits, our recent discussions with operators have shown that there’s a lot about electronic signatures and electronic document storage that is not universally well understood. Unfortunately, in some cases these questions or misconceptions are interfering with the ability for all affordable property management companies to take advantage of the efficiencies, cost savings, and risk reduction that come with electronic signatures and electronic document storage. This has prompted us to put together these 10 tips and advice.

What Are 10 Things to Know About Electronic Signatures, Transmission and Document Storage?

1. Electronic signatures must meet specific criteria to be considered legally binding. If you are not sure if your applications or recertification process are in compliance, contact your software provider.
2. Owners and management agents adopting electronic signatures must provide applicants and tenants the option to utilize wet (i.e. original) signatures and paper documents upon request.
3. Know your state and local laws. While HUD may permit electronic signatures, you may be required to get a wet signature on some forms such as leases and addenda, the HUD-50059 and the HUD-9887.
4. Keep in mind, signing a document, scanning it and emailing it as a PDF doesn’t constitute electronic signature – that’s simply an electronic transmission of a document with a wet signature.
5. When transmitting a document via email, you should password protect the document – especially if that document contains Personally Identifiable Information (PII). And do not include the password for the document in the same email.
6. It is okay to start scanning move-in files and recertification packets as you are processing them; giving you a combination of paper and electronic files.
7. It is prudent to devote time to gradually scan and digitally store all previous paper files. Consider starting this task with your Year 1 Tax Credit files.
8. Follow the same guidelines for access to electronic files as you have for paper. For example, Enterprise Income Verification (EIV) documents should be stored separately, and access should be limited.
9. While HUD’s Nov. 6, 2020 notice does not apply to the HOME program or Public and Indian Housing, check with your local public housing agency to see if they permit electronic signatures, transmission and storage. Most state housing finance agencies and rural housing offices will allow this.
10. You should read HUD Housing Notice 2020-10 to make sure you are fully aware of the guidance for electronic signatures, transmission and storage.

Ready to Consider Electronic Signatures and Electronic Document Storage?

If you’re interested in learning more about how you can implement electronic signatures and electronic document storage, ResMan is ready to help! Our Affordable Housing capabilities include online leasing, electronic signatures and unlimited electronic document storage. Our solution offers a highly intuitive online leasing workflow that meets application and lease format requirements specific to the affordable housing market. It gives the industry the technology its operators need to streamline their application process – something the conventional market has had available to them for a long time.

We invite you to reach out to schedule a demo or to view this webinar that explains electronic signatures and electronic document storage and also provides a demo of ResMan’s solution.