The Code of Real Estate (540/1995), which came into force on 1 January 1997, regulates real estate sales, real estate liens and the title and mortgage registering system. According to the primary provisions of the Code of Real Estate, a real estate’s bill of sale and mortgage instrument must always be in writing. According to the Code of Real Estate, a sale of real estate shall be concluded in due form, meaning that both the seller and the buyer—or their attorneys—must sign the bill of sale. Additionally, a notary must attest the sale in the presence of all the signatories of the bill of sale. However, the provisions concerning the sale of real estate were revised, and amendments became effective on 1 November 2013. The new provisions permit the majority of real estate transfers to be made in electronic form.
Primary provisions on formal requirements concerning a real estate’s bill of sale are also applicable to trades and gifts of real estate. The pre-contract and cancellation of a sale of real estate shall also be concluded in accordance with the provisions on formal requirements concerning the sale of real estate.
According to the new provisions, the majority of real estate transfers can be made electronically in the trading system. This trading system is maintained by the National Land Survey of Finland. Some of the provisions will not take effect until the beginning of March 2015. Also, paper-based mortgage instruments can be replaced with electronic mortgage instruments.
A sale of real estate shall be made in an electronic form, which will be reviewed according to data in the Title and mortgage register and a number of other official records. A notary is not used in the trading system, but the system ensures that the contents of the bill of sale correspond to requirements of the law.
The system does not accept bills of sale that do not fulfil formality. Therefore, a bill of sale should contain the necessary terms of trade. The content requirements are the same as in the past (the intent to convey, the real estate to be conveyed, the seller and the buyer and the price or other consideration). A sale of real estate occurs when the seller and the buyer accept the bill of sale with the same content.
The seller and the buyer are the parties in the trading system. Use of a representative requires a pre- stored authorization in the system. Individuals can identify themselves to the trading system with online banking credentials, mobile certificates, or an electronic ID card. Companies can identify themselves with Katso-identification.
Electronic bills of sale and electronic mortgage instruments are alternatives, not replacements, to traditional documents. The traditional methods and paper documents can still be used in real estate sales, and also mortgage applications can still be submitted in writing.