Are electronic signatures legally binding?

Yes. Electronic signatures are generally enforceable under the ESIGN Act (15 U.S.C. §7001) and UETA where adopted, provided intent, consent, attribution, and reliable retention are present.

When is notarization required?

Notarization is usually not required for plain contracts but is required for deeds and some acknowledgements; check state and county recorder rules before execution.

Can a remote online notarization be used?

Many states permit RON subject to identity proofing and audio-video retention; verify state notary rules and retention requirements before relying on a RON session.

What happens if the signature name differs?

A mismatch between signed name and legal name can create enforceability issues; attach evidence of authority or notarized proof of signatory capacity to avoid disputes.

How should I store the final agreement?

Keep an unalterable PDF and the platform audit trail; retain records according to IRS, HIPAA, or other applicable retention rules depending on document content.

How do I correct an executed commencement date?

Use a written amendment or ratification signed by all parties; avoid unilateral changes and ensure any amendment is executed with the same formality as the original.

Electronic Signature
Templates
Real estate
Real Estate Commencement Agreement

Real Estate Commencement Agreement

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REAL ESTATE COMMENCEMENT AGREEMENT

This Real Estate Commencement Agreement (the Agreement) is made effective as of by and between the parties identified below. The parties intend by this Agreement to establish the terms and conditions under which the transaction described herein will commence, including payment of commencement consideration, performance of due diligence, and conditions precedent to closing.

Parties

Owner (Seller/Lessor) — Full legal name Owner Address for Notices Commencing Party (Buyer/Developer/Tenant) — Full legal name Commencing Party Address for Notices

Property Identification

Property Street Address Parcel / APN Number Legal Description

Commencement Terms

Commencing Party shall deliver to Owner a non-refundable commencement fee / earnest money in the amount of $ payable by wire or certified funds no later than (Commencement Payment). The Commencement Payment shall be applied to the Purchase Price or returned in accordance with the express termination rights set forth herein.

Purchase Price (if applicable) Inspection / Due Diligence Period

Commencing Party shall have days from the effective date to complete inspections and due diligence. Inspection period ends on . Commencing Party shall provide Owner written notice of termination or election to proceed before expiration of the inspection period.

Financing Contingency

This Agreement is for a period of days. Commencing Party shall use commercially reasonable efforts to obtain financing and shall deliver notice of lender approval or denial in writing.

Closing and Possession

Anticipated closing date: . Possession to be delivered on , subject to completion of agreed closing conditions.

Permits, Title & Survey

Owner shall deliver recordable title evidence and any current surveys in Owner's possession. Commencing Party may, at its expense, obtain a phase I environmental report, survey, and additional title endorsements. Title objections must be delivered within days of receipt.

Insurance, Indemnity and Risk Allocation

During the Commencement Period and until closing or termination, each party shall maintain insurance customary for transactions of this type. Commencing Party shall indemnify Owner for liabilities arising from Commencing Party's inspections or entry onto the Property, except to the extent caused by Owner's gross negligence or willful misconduct.

Representations and Warranties

Owner represents and warrants that: (a) Owner is the fee owner with authority to enter this Agreement; (b) there are no pending material actions against the Property known to Owner; and (c) to the best of Owner's knowledge the Property is not subject to unremedied code violations. Commencing Party represents that it has the authority to enter this Agreement and will comply with applicable laws in exercise of its rights hereunder.

Disclosures

Lead-based paint known: Yes No

Mold or water intrusion known: Yes No

Prior material damage or repair: Yes No

Known environmental hazards (asbestos, contamination): Yes No

Default, Remedies and Termination

If Commencing Party fails to timely deliver the Commencement Payment or otherwise breaches a material obligation, Owner may terminate this Agreement and retain the Commencement Payment as liquidated damages, not as a penalty, provided such retention is reasonable and proportionate to Owner's expected damages. Owner's remedies are cumulative and include specific performance where appropriate.

If Owner fails to convey title in accordance with this Agreement, Commencing Party may seek return of the Commencement Payment and other equitable relief, including specific performance when available. Any termination must be delivered in writing in accordance with the Notices section.

Notices

All notices required or permitted shall be in writing and shall be delivered by personal delivery, national overnight courier, or certified mail to the addresses set forth below (or to such other address as a party shall designate in writing).

Owner Notice Contact Name Owner Notice Address Commencing Party Notice Contact Name Commencing Party Notice Address

Miscellaneous

Governing Law: This Agreement shall be governed by and construed in accordance with the laws of the state designated by the parties. Venue for any dispute arising out of this Agreement shall lie in the state and county where the Property is located unless otherwise agreed in writing.

Entire Agreement; Amendment: This Agreement constitutes the entire understanding between the parties with respect to the subject matter hereof and supersedes all prior negotiations and understandings. This Agreement may be amended only by a written instrument executed by both parties.

Counterparts and Electronic Signatures: This Agreement may be executed in counterparts and delivered electronically; each counterpart shall be an original, and all such counterparts together shall constitute one instrument.

Acknowledgement

The parties acknowledge that they have read and understood this Agreement, that they have had the opportunity to consult legal counsel, and that they enter into this Agreement voluntarily and with full authority to do so.

Owner — Printed Name:

By:

Date:

Commencing Party — Printed Name:

By:

Date:

What the Real Estate Commencement Agreement Is

A Real Estate Commencement Agreement is a written contract that defines when work, occupancy, lease obligations, or project performance officially begins for a property transaction. It records the commencement date, parties, property description, deliverables or leased premises, payment or rent terms, and any conditions precedent such as inspections or permits. The agreement helps coordinate closing, recording, and billing steps and serves as the reference for performance timelines, prorations, and milestone tracking across lenders, title companies, contractors, tenants, and owners.

Why a Clear Commencement Date Matters

Establishing a precise commencement date reduces disputes, aligns obligations for rent, insurance, and tax proration, and clarifies trigger events for performance and remedies.

Who Typically Prepares or Signs This Agreement

Common participants include owners, tenants, brokers, general contractors, lenders and title/closing agents involved in a property transaction.

Property owners, developers and landlords who need to set formal start dates and coordinate recording or billing
Tenants and property managers who must confirm possession, rent commencement, and inspection windows
Contractors and subcontractors who require an agreed start date tied to payment milestones

Each party should confirm authority to bind the entity and retain a signed copy for records and compliance.

Core Sections to Include in a Professional Agreement

A well‑drafted Real Estate Commencement Agreement contains standard clauses that identify parties, the property, timing, payment and contingency language to avoid ambiguity.

Parties

Full legal names and entity types for all parties, including authorized signers and contact details for notices and service.

Property Details

Address, legal description, unit or parcel identifiers and exhibit references for any site plans or scope attachments.

Commencement Date

Exact start date using MM/DD/YYYY and conditions that must be satisfied before the date is effective.

Term and Milestones

Defined lease term or project timeline with milestone dates, completion criteria, and remedies for delays.

Payment Terms

Rent, deposits, prorations, retainage, invoicing schedule, and responsibility for taxes, utilities, and insurance.

Contingencies

Inspection rights, permit approvals, lender conditions, title exceptions, and termination rights if contingencies fail.

Step-by-Step: Completing the Agreement

Follow these sequential steps to prepare, sign, and distribute the agreement.

01

Gather documents: Collect title, lease, permit and identity documents.
02

Draft terms: Set the exact commencement and any conditional language.
03

Review legal: Have counsel verify obligations and recording needs.
04

Sign and distribute: Execute, notarize if required, and share copies with stakeholders.

How to Configure an Online Signing Workflow

Typical settings for a digital workflow ensure correct routing, authentication, and field behavior during eSignature execution.

Setting	Typical Value
Signer Order	Sequential or parallel as required
Authentication	Email + SMS code or ID verification
Required Fields	Make signatures, dates, and initials mandatory
Notice & Copies	Auto-send completed PDF and audit trail to parties

Where to Send or File the Executed Agreement

After execution, route the agreement to parties and any required public office or closing agent depending on its role in the transaction.

Title/Closing Agent: For recording instructions or escrow processing
Lender: If lender conditions or loan documents reference the commencement
County Recorder: Only if the agreement is required to be recorded
All Parties: Provide fully executed copies with the audit trail

Digital Signing and File Format Considerations

Ensure the platform you use supports required authentication, audit trails, and export formats before sending for signature.

File Formats: PDF and DOCX supported
Authentication: Email, SMS, or KBA
Integrations: CRMs and cloud storage enabled

Key Dates and Timing to Track

Record and monitor critical dates to avoid missed obligations, delayed closings, or proration disputes.

Effective Date:

Date parties sign or as stated in contract

Commencement Date:

Date possession or work formally begins

Inspection Period End:

Deadline to complete inspections or object

Closing/Delivery Date:

Date funds transfer and title changes occur

Recording Window:

Timeframe to record deeds or notices if required

Authentication, Notarization and Witness Steps

Follow a clear sequence when notarization or witnesses are required to ensure the document is admissible and recordable.

01

Confirm Signatory Authority

Verify signers have authority to bind the entity

02

Choose Notarization Method

In-person notary or approved RON session as permitted

03

Witness Requirements

Add witness signatures if state or document requires them

04

Record Notary Details

Include notary block, commission number and venue

05

Retain A/V Records

For RON, preserve audio-video per state rules

06

Record if Needed

Submit to county recorder only for recordable instruments

07

Distribute Executed Copies

Send final PDF and audit trail to stakeholders

08

Archive Originals

Store master copy and metadata in secure records

Security and Compliance Features to Consider

Encryption: TLS 1.2/1.3 in transit; AES-256 at rest

HIPAA: BAA available for protected health information

Audit Trail: Timestamps, IP addresses, and action logs

SOC 2: SOC 2 Type II report available

21 CFR Part 11: Support for FDA-regulated signatures

ISO 27001: Certified information security posture

Consequences of an Incorrect or Missing Commencement

Contract Disputes: Delay damages or breach claims

Recording Defects: Title exceptions or invalid recordation

Tax Impacts: Proration errors and audit exposure

Payment Exposure: Unclear rent triggers and withholding risk

Signature Invalidity: Improper execution may make it unenforceable

Backup Withholding: 24% withholding risk for incorrect TINs

Common Preparation Errors to Avoid

Using informal property descriptions that do not match title or county records, which creates ambiguity at recording or closing.
Failing to specify whether the commencement date is conditional on permits, inspections, or lender approvals, producing disputes over possession and payment.
Not verifying signatory authority for entities, which can lead to rescission claims or delayed enforcement in title or escrow.
Omitting a retention plan or a clause allocating responsibility for filing and record retention, complicating future audits and compliance.

Practical Tips for Accurate and Efficient Completion

Adopt these practices to reduce errors, improve clarity, and streamline signature and recording workflows.

Use precise dates

Record effective and commencement dates using MM/DD/YYYY. Ambiguous references like 'upon closing' should be defined to avoid disputes and to coordinate proration and insurance coverage.

Attach exhibits

Include site plans, legal descriptions, and a budget or rent schedule as exhibits to avoid later interpretation disputes and to ensure consistent references by title and escrow.

Confirm authority

Obtain corporate resolutions or proofs of authorization for entity signers and record signer capacity in the signature block to reduce challenges to enforceability.

Preserve audit trails

When using eSignature, retain the platform's audit trail and any RON A/V session records; these preserve signer intent and identity evidence in case of later contest.

Practical Examples and Real-World Use

These brief examples illustrate how practitioners and organizations use commencement agreements to resolve timing and compliance issues.

Martin Properties

A regional property manager used an online Commencement Agreement to start tenant occupancy without in-person meetings.

The remote execution saved travel and scheduling time.
The manager preserved full compliance by retaining signed PDFs and audit trails, resolving move-in disputes quickly and ensuring rent proration matched occupancy dates.

Optica Ventures

A small developer standardized a commencement clause across projects to reduce negotiation cycles.

Standard language clarified permit contingencies.
The standardized approach accelerated closings, reduced attorney review hours for routine starts, and made milestone billing predictable for contracting teams.

eSignature Vendor Comparison for Signing and Storing Agreements

Compare general vendor features and price points relevant to signing real estate commencement agreements; signNow is listed first for parity in comparison.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7-day free trial	No	No	Yes, limited	Yes, limited
Bulk Send	Yes	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No
Envelope Cap	No cap	100 envelopes/user/year	No cap	No cap	No cap

Frequently Asked Questions and Troubleshooting

Answers to common questions about validity, notarization, electronic execution, and recordkeeping for commencement agreements.

Need help? Contact support

Are electronic signatures legally binding?
Yes. Electronic signatures are generally enforceable under the ESIGN Act (15 U.S.C. §7001) and UETA where adopted, provided intent, consent, attribution, and reliable retention are present.
When is notarization required?
Notarization is usually not required for plain contracts but is required for deeds and some acknowledgements; check state and county recorder rules before execution.
Can a remote online notarization be used?
Many states permit RON subject to identity proofing and audio-video retention; verify state notary rules and retention requirements before relying on a RON session.
What happens if the signature name differs?
A mismatch between signed name and legal name can create enforceability issues; attach evidence of authority or notarized proof of signatory capacity to avoid disputes.
How should I store the final agreement?
Keep an unalterable PDF and the platform audit trail; retain records according to IRS, HIPAA, or other applicable retention rules depending on document content.
How do I correct an executed commencement date?
Use a written amendment or ratification signed by all parties; avoid unilateral changes and ensure any amendment is executed with the same formality as the original.

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