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Coop Pank concluded a mortgage loan agreement using contact-free distant notarial authentication for the first time

Domestic Coop Pank started providing the option of distant notarial authentication of loan contracts and concluded the first contact-free loan contract for real estate financing on Wednesday, 22 April. The entire process, starting from application and up to concluding a notarial transaction by means of distant authentication, was conducted through online channels without meetings in person.

Karin Ossipova, head of Mortgage Lending at Coop Pank, says that the bank’s clients will now be able to conclude contracts or contract amendments which require notarial authentication in the manner appropriate for a digital state, which means that the entire process of loan application and issuing has been transferred to online channels. “While the process could be arranged electronically at the bank up to the notarial transaction before, the new notaries regulation allows notarial transactions to be completed by means of contact-free distant authentication,” Ossipova elaborated.

Due to amendments to the notaries regulation, almost all notarial acts after 6 April 2020 can be performed by means of distant authentication. Coop Pank provides the option of contact-free distant notarial authentication for the conclusion of contracts for business loans, mortgage loans, and other loans and amendments to loans against real estate collateral. There is no limit as to the price of the transactions completed by means of distant authentication.

Karin Ossipova notes that the state of emergency has accelerated the digitisation of services significantly: “A number of new digital services will remain in use after the crisis, too, as clients prefer these because of their convenience. We held a survey in March, which shows that 55 per cent of the respondents prefer doing everything themselves online in the process of applying for a loan; in addition, other 16 per cent stated they would like to apply for loans online if they were provided with consultations over the phone before the conclusion of the contract.”

Ossipova believes distant authentication is necessary for avoiding physical contact and also for saving employees’ time as it allows transactions which formerly required all the parties to go the notary’s office, which was especially inconvenient for clients coming from small localities or residing in other countries, to be completed digitally. “Distant authentication is an option, not an obligation. It must also be taken into consideration that every notary may establish some procedural requirements of their own or refuse to perform distant authentication in case there any obstacles, for instance, if some of the parties to the transaction cannot participate in the digital process, if there are connection problems, if the client’s intention is not clear or if digital signing fails,” Ossipova explained.

The bank’s client Martin Meisalu says it was decided to use distant authentication for a supplement to the existing contract with Coop Pank, which involved the notarisation of changes to the collateral. “As there were numerous parties to our transaction, we greatly valued the opportunity to complete the transaction without leaving our homes during the state of emergency. The entire process was very convenient albeit a bit clumsy because of the participation of so many parties as well as the novelty of the solution. Still, the transaction was completed within a reasonable time and, which is even more important, without close personal contact,” Meisalu added.

Performing a notarial act with the use of distant authentication requires each party to the transaction to have access to a separate computer with a webcam, speakers or headphones and a microphone over the entire duration of the transaction. One also needs an ID card with a card reader or Mobile ID and the PIN codes for electronic signing. Distant authentication only functions in Google Chrome, and the bandwidth of the internet connection must support video calls. For example, a cable network Wi-Fi or mobile data network with at least 30 Mbit/s would be suitable.

A notary fee of 24 euros applies to a transaction completed by means of distant authentication. Similarly to regular notarial transactions, the parties are to agree on which party will be paying the notary fee and what extent.