The Latest States To Pass Remote Online Notarization Laws
The 21st-century real estate closing is radically different from closings of the past. Since 2011, there has been major acceleration for eClosings or digital closings, and laws and technology that allow eNotary or remote notary processes are the fuel. While I’m sure many of us are still wondering where those flying cars and hover boards a la Back to the Future II are (hey, at least Nike made good on the self-lacing basketball shoes), closings of today are becoming easier and faster to complete.
As more states enact RON laws, more consumers will demand the convenience of remote notarization.
Here are the latest states that have approved the process, the model legislation that serves as the framework for many states, and some safety and implementation concerns to consider before you jump in.
What is Remote Online Notarization?
Remote Online Notarization (RON) allows banks, title companies, law firms, and other businesses to complete important transactions that require signatures and a notary seal remotely with the aid of online audio and video technology.
For settlement agents, this means that closing on a property doesn’t require all the parties to be in the same room. While notaries are required to be present, signers may be located anywhere with most RON laws.
Electronic Notarization vs. Remote Notarization
It’s important to distinguish between eNotarization and remote notarization. While they sound similar, there’s a key difference. The first allows documents to be signed and notarized digitally BUT requires the signer to be present in the same room as the notary. The latter takes that one step further and allows documents to be signed and notarized digitally and without the requirement of being in the same room, building, state, or in some cases the same country.
The Uniform Electronic Transactions Act (UETA) made it possible to use electronic signatures and storage of financial documents in digital formats in lieu of a traditional wet signature on paper. This was the first step in making eClosing and eRecording a reality. Other state and federal laws including the “full faith and credit” clause of the US Constitution, the federal ESIGN Act, and other state statutes act as the legal structure supporting electronic notarization.
All together these laws establish two key principles: 1. Notaries are authorized to electronically notarize documents with eSignatures completed in the presence of the notary (not remotely) 2. When performed in compliance with the laws of one state, a notarial act executed in that state will be recognized as valid in another state, even if those states have conflicting rules and regulations on the process.
These well established laws allowing eNotarization paired with new RON legislation is the catalyst for fully digital closings.
What state was the first to pass remote online notarization?
Virginia became the vanguard of the RON movement when Governor Bob McDonnell signed a bill into law in 2011 and implemented the process in 2012. This was the first bill in the country to allow commissioned Virginia electronic notaries to notarize documents online via audio-video technology. Virginia’s law was an integral part of establishing some of the key principles of RON like defining “personal appearance” for a remote closing, how to verify the signer’s identity and the location of parties, and best practices for digital record keeping to ensure the notary seal is valid and tamper-proof.