Since the COVID-19 pandemic upended life as we knew it, the use of remote communication and collaborative technologies has become a permanent addition to everything, from schools to workplaces and everything in between. We have found ways to work remotely, learn remotely and even have “happy hours” remotely, but some important life necessities have been more difficult to assimilate into a new remote-enabled world. One such necessity is the notarization of important documents.
Remote Online Notarization
Whether it involves buying or selling a house, taking out a loan or refinancing a mortgage, the seemingly quaint and archaic requirement of appearing before a notary public to have them stamp a document seems out of place in the modern age.
The growing alternative to the traditional notary process is Remote Online Notarization (RON). Generally, states which permit RON allow a signor to a document to appear remotely before a notary—via Zoom or Teams, for example—and allow the notary to apply a state provided digital seal and signature to the document upon remotely verifying the signor’s identity. During the COVID-19 pandemic, the American Land Title Association (ALTA) reported that use of RON increased a whopping 547% in 2020 compared to 2019. The explosion in RON utilization and the benefits it can provide have won it resounding support among many major national interest groups, including ALTA, the National Association of Realtors and the Mortgage Bankers Association.
Notarization Made Convenient and Efficient
While the vast majority of states have passed statutes permitting the use of RON, including Ohio, the patchwork of laws is far from uniform in their requirements, and a handful of hold-out states continue to have reservations towards a move to accept RON.
The clearest benefit of RON is its convenience and efficiency. For ordinary people in need of notarization, it can be a hassle to find and schedule an appointment with a notary, print out and bring the documents in need of notarization, and then safely retain those documents for the indefinite future. For others, such as overseas military personnel and their families, locating an in-person notary can be next to impossible.
In an era when anyone can remotely schedule and attend appointments as private and important as with their doctor, and sensitive documents such as medical or financial records can be kept in the cloud without a second thought, it seems to only make sense that the execution of potentially life altering documents should be no different.
Security and Validation Remain Primary Concern
Despite these benefits, widespread adoption of RON is not without concerns. Detractors point to the fact that the ultimate goal of notarization is not convenience or efficiency, but security and ensuring the validity of the documents notarized. Much like how the traditional notarization process requires the notary to maintain a meticulous journal to support their notarizations, many states which permit RON require the digital collection and retention of supporting information, such as personally identifying documents, or even an audio-video recording of the notarial act. What is the result if such supporting documentation is corrupted, stolen or lost? Would such an event render the notarized document open to challenge?
Further, there have already been high-profile examples of attempted RON fraud. In 2021, a homeowner in Washington State reported that another person had attempted to fraudulently pose as her and sell her Seattle-area home via a remote notary. The homeowner accused the notary of negligence for failing to take proper steps to verify the seller’s identity.
The SECURE Notarization Act of 2021
In an attempt to secure the economic benefits that RON can provide, while providing nationwide access and minimum security measures to the use of RON, the Securing and Enabling Commerce Using Remote and Electronic (SECURE) Notarization Act of 2020 was introduced into the U.S. Senate by Sen. Kevin Kramer (R-ND). While this original version of the bill died in committee, it gave rise to a general consensus on Capitol Hill that action was needed to modernize notarization nationwide in response to the economic downturn of the COVID-19 pandemic.
On June 17, 2021, the bill was reintroduced in the U.S. House by U.S. Reps. Madeleine Dean (D-PA) and Kelly Armstrong (R-ND) as the SECURE Notarization Act of 2021 (the Act). The Act passed the House on July 27, 2022 and is now before the Senate for consideration.
The Act is designed to mirror the success of prior nationwide federal/state modernization laws such as the Uniform Electronic Transactions Act (UETA) and Electronic Signatures in Global and National Commerce Act (ESIGN), which permitted the widespread use of electronic signatures that are commonplace today in business.
Nationwide Security Measures to be Followed
The Act aims to immediately permit the nationwide use of RON while imposing a minimum set of security measures that must be followed. Notaries performing RON will be required to employ multi-factor authentication methods to confirm the signor’s identity, such as knowledge-based authentication and credential analysis. Further, notaries will be required to use tamper-evident technology and retain an audio-visual recording of the notarial act.
While the Act would impose minimum standards for security, it would permit additional requirements imposed by state law to supersede those of the Act so long as they meet the minimum requirements. If a state does not have a RON law on the books, or does not meet the federal minimum requirements, notaries in that state would be held to the federal regulations.
While the Act appears poised to pass the Senate and become law, its long-term effects on the critical process of notarization for millions of future documents in the decades to come will not be known for some time. KJK can help you prepare for the SECURE Notary Act to ensure you are in compliance as both a signor and a notary. For more information, contact Matt Viola at ([email protected]; 216.736.7253) or Jim Scherer at ([email protected]; 216.736.7296).