As recently as the late 1990s, notarial acts were pretty straight forward. You went to a bank or government office, asked a notary to witness your signature, signed a paper document with an ink pen and watched the notary apply their signature and stamp to the document. Simple. But changes in technology and changes in the law have taken that simple act and given it many more options.
A host of laws at the federal and state levels now allow signing parties and the notary to execute electronic documents using various forms of electronic signatures. Typically, these laws define an electronic signature as “any sound, symbol, or process attached to a record and executed or adopted by a person with the intent to sign the record.” Courts have interpreted that definition very broadly. Text messages and typed names at the end of an email have been ruled to be legally binding signatures.
Expanding this even further, 20 states have adopted laws that permit the signer to appear before the notary by the use of audio-visual communication technology. This has become known in the marketplace as Remote Online Notary – or RON, for short. It is anticipated that another dozen states will enact similar RON laws during the 2020 legislative session.
When it comes to documents intended to be submitted for recording in the public record, states have adopted enabling legislation that authorizes the use of electronic records, electronic signatures, electronic notary, and electronic recording. Today, more than 2,000 counties in 48 states accept some form of electronic recording.
But in spite of the enactment of enabling legislation, consistent court rulings supporting the legitimacy of electronic signatures, and increased consumer use of electronic signing platforms, a large number of counties still will not accept electronic documents executed with electronic signatures and electronic notary. While these documents may have a slightly different appearance than their paper counterparts, there’s really no legal reason for taking this position, but a number of counties still do.
Here at Simplifile, we understand that changes like this can feel a bit unsettling, but we want our county partners to feel confident accepting this new style of record. These documents and signatures are supported by statutes, administrative rules, and case law. These documents meet the recording requirements in all but two states and they provide the constructive notice intended when recorded in the public record.
As lenders, settlement agents and consumers search for a more digital loan experience, there will be increased desire to utilize e-documentation for all the documents in a loan file, including the recordable documents. If you have questions about the reliability and legality of these documents, please contact us. We have experts who can help you understand and have confidence in accepting these documents in your office.