Streamlined processes and faster services are essential for intelligent businesses whether recording powers of attorney or establishing trusts, remote online notarization (RON) provides an opportunity to improve efficiency and create a better customer experience.
RON utilizes audio-visual technology and e-signature-related technologies like ID verification, knowledge-based authentication, digital audit trails, and more to complete notarizations online. But does this new process hold up to state regulations?
Legal Issues
A straightforward process like notarization becomes more complicated when conducted online, with evolving laws and standards to consider. That’s why mortgage professionals must stay current on the latest developments in remote online notarization (RON).
RON is a form of notarization that allows the notary to complete the notarial act without the principal being present in person at the same time and location as the notary. Currently, 44 states and the District of Columbia have passed RON laws, and New York Gov. Hochul signed a law allowing RON during the COVID-19 pandemic (see Holland & Knight’s previous alert on RON).
These state laws vary regarding who may conduct a RON, what types of documents may be notarized remotely, and the technology required to communicate with each other. For more information, MBA Education’s Compliance Essentials offers a comprehensive analysis of RON requirements in every state, available for purchase individually or by volume.
Security
During the COVID-19 lockdown, attorneys needed to have their clients’ ink signatures on paper documents notarized online. While necessary, it also revealed that notaries must be more attuned to fraud issues, such as whether a document is being signed knowingly and voluntarily or under duress.
Remote online notary vendors use several security measures to mitigate these potential risks. These include credential analysis, identity proofing, and knowledge-based authentication. Moreover, the platforms allow in-person meetings to verify identity and express consent.
In addition, RON provides a digitized record for each document notarized. This could reduce the number of copies of legal documents that must be reprinted. Additionally, if someone cannot sign a document in person due to illness or distance, they can still have it notarized remotely. This is particularly useful for people living abroad or unable to visit a notary’s office. The digitized record allows them to meet with the notary from home or another convenient location.
Liability
RON offers the same proof of identity and notarization as traditional in-person notarizations with a few added security features to protect all parties. These include an electronic journal, an audio/video recording of the session, and a tamper-evident seal that can help authorities determine whether the document has been altered.
Additionally, RON allows signers to appear before a notary in their home or office via video conference technology, eliminating the need to travel long distances. This is especially helpful for consumers with disabilities who cannot travel due to health or caregiving obligations.
While RON has become a viable option for real estate closings, it is still relatively new and carries some risks. As the process becomes more popular, Notaries should ensure that they comply with state laws and that their chosen RON/eClosing service providers provide the highest level of security possible. Otherwise, Notaries could face frivolous lawsuits that could threaten the integrity of their work.
Privacy
As with signing documents electronically, the document to be notarized is displayed on the signer’s and notary’s device screens. The final document is tamper-evident once the notary has applied their digital seal and signature (and completed any applicable portions of the notary certificate).
In addition to a notary’s knowledge of the signer, RON also involves credential analysis and identity proofing—where third-party services validate government-issued identification or confirm an individual’s identity by reviewing public and proprietary data sources. This is essential to ensure that RON can meet the same evidentiary standards as traditional notarization.
New York’s RON law, passed initially temporarily during the COVID-19 pandemic, has been made permanent. Holland & Knight’s previous alert explains four key takeaways from this amendment, and our team is continuing to monitor state-specific RON legislation and regulations. We are also monitoring the SECURE Notarization Act, which would streamline the process through national standards and ensure enforceability across state lines.
