and administrative costs for processing contracts
Improve business efficiency for real estate companies by digitizing time-consuming paper-based processes
Implement electronic documents in compliance with the Building Lots and Buildings Transaction Business Act
Make contract and application processes easier for tenants and other users to complete
Eliminated the need to mail paper contracts through digitization
Reduced lead time and administrative costs for processing contracts
Eliminated paper storage needs as contracts can be stored electronically
Easy for users who can complete a contract by typing their name, with no need for seals
In the real estate industry, contract management processes are generally completed entirely on paper. In other words, it’s a rather analog process. One company that is taking on this challenge with the aim of improving business efficiency is At Home Co., Ltd., a company that provides systems and services around real estate information. It currently delivers Smart Contracts via Adobe Acrobat Sign to JA Amenity House, a company that manages more than 20,000 rental properties in Japan’s Kanagawa Prefecture.
For years, At Home has taken strides to digitize the many analog administrative workflows that exist in the real estate industry, such as paper-based contract management. Smart Contracts, one of the real estate operation support services that At Home delivers to real estate companies, is one service that was developed using Adobe Acrobat Sign, the electronic signature solution within Adobe Document Cloud.
“At Home has provided support for the real estate industry for many years,” says Mr. Masafumi Hara, Head of the At Home Core Services Development Department. “Again and again, our customers would request help making paper-based processes more efficient. With a falling birthrate and rising number of elderly people in Japan, we predict that companies will become increasingly understaffed, which will further increase the future needs for paperless workflows in the real estate industry.”
“We thought that one solution would be the digitization of contract workflows, so we started setting the stage for digital contract services many years ago. Because electronic signatures through Adobe Acrobat Sign are legally recognized and the solution has many built-in security features, we felt comfortable offering it to customers. We did some research on what types of contracts could be digitized under the current Building Lots and Buildings Transaction Business Act, and we discovered that we would have no issues with digitizing contracts for lease renewals, so we started our service,” adds Mr. Hara.
Mr. Masafumi Hara
Head of the Core Services Development Department, At Home Co., Ltd.
JA Amenity House, the company that implemented Smart Contracts, provides apartment and condominium management in Kanagawa Prefecture. JA Amenity House prides itself for being the number one company based in Kanagawa Prefecture in terms of number of units managed.
In 2011, JA Amenity House established a subsidiary company, Amenity Housing, that specializes in tenant management, including mediation and apartment-hunting support for tenants.
When dealing with rental properties, all workflows involved paper-based documents, including inspection applications to other real estate companies, and tenant applications, screening, disclosures, and tenant contracts for end users. With so much labor involved in mailing or faxing documents and keeping accurate ledgers, improving business efficiency was a big issue for JA Amenity House.
“In order to drive business efficiency, we simply had to re-examine the traditional paper-based contract process,” says Mr. Teruo Koyota, Head of the Rental Management Department for JA Amenity House. “Around 2018, we started to look into digital solutions. After comparing several options, we selected the Smart Contracts electronic signature service from At Home.”
JA Amenity House decided to start using Smart Contracts for the renewal process for rental properties. The first task was to obtain email addresses required from tenants for the electronic contract. Starting with tenants who would soon be eligible for a contract renewal, the company mailed a postcard printed with a QR code that would take people to a website where they could register their email addresses. As a result, the company obtained nearly 100% of the email addresses that it needed, excluding tenants who wanted to complete their renewal through paper documents.
For tenants who registered their email addresses, they would open the renewal notification email on their computers or mobile devices and tap on the included link. This would allow them to view documents in a browser. After reading the content, they either typed their names into the signature field or signed by hand. Then they simply tapped on the “Click to sign” button to complete their electronic signatures.
“The Adobe Acrobat Sign Admin Console allows us to check on contract document status in real time, so there was no need to search through stored paper documents like before,” says Mr. Tomoya Ono, Assistant Group Supervisor for the At Home Core Services Planning Office. “Being able to check on a contract in real time made Adobe Acrobat Sign a perfect match for digital contracts in the real estate industry.”
Mr. Tomoya Ono
Assistant Group Supervisor, Core Services Planning Office, At Home Co., Ltd.
JA Amenity House started using Smart Contracts for its contract renewal process in January 2019. While the company is currently operating a pilot test by switching over only part of its renewal contracts to electronic contracts, the results are clear.
“Up until now, the contract renewal process involved putting a paper contract output from our system into an envelope and mailing it to tenants,” says Ms. Akari Imai, who handles contract renewals for the Amenity Housing Tenant Support Department. “After we renewed the contract, we would send duplicates to the tenants by mail. Furthermore, if there were errors in the documents, we would need to make the revisions and mail a new copy of the documents to the tenants. Being able to eliminate this type of back and forth mailing has a huge impact on our time and labor. We also no longer need to preserve a paper ledger, which is a huge benefit for us.”
Staff process an average of 200 contract renewals every month. While still in the test phase, the electronic contract process has worked smoothly so far.
JA Amenity House is thinking of switching to electronic contracts for additional contracts that are not required to be paper-based under the Building Lots and Buildings Transaction Business Act.
“We are investigating the use of digital contract processes for monthly parking rentals,” says Mr. Koyota. “We are considering displaying a QR code in the parking lot and allowing people to submit a new application right away from their smartphones. We would also like to start digitizing new tenant contract workflows as soon as amendments are made to the Building Lots and Buildings Transaction Business Act.”
“Migrating to digital contracts not only improves the efficiency of contract processes, but it’s also very beneficial for end users,” says Mr. Hara. “We’re thinking about using Smart Contracts for internal processes that traditionally require stamps or seals, such as when sending a job offer letter to new talent or processing a construction order on a property.”
*The published information is current as of June 2019.