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Editorial 9 MIN READ

Virtual notary laws: a boom and a patchwork

Nine states had remote online notarization on the books before March; in seven weeks the rest of the country improvised its way into something that looks similar but is not

The Editors
Staff, Incorporator.org
9 min read Updated
Contents 5 sections
  1. The standing regimes, built over nine years
  2. Seven weeks of emergency rulemaking
  3. The interstate recognition problem
  4. RULONA and the permanent question
  5. Sources

emote online notarization, a thing ten states had spent a decade debating and nine had actually authorized, became a fifty-state emergency policy in March. What now exists is not a national standard. It is roughly forty different temporary regimes sitting next to nine permanent statutes, with federal legislation introduced but not passed.

If you are signing an operating agreement, a deed, or a financing document in May 2020, the document is probably being notarized by someone who had never heard the phrase "tamper-evident audit trail" eight weeks ago.

The standing regimes, built over nine years

Virginia was first. In 2011 the General Assembly amended Title 47.1 to allow a Virginia notary to perform a notarial act for a remotely located signer using audio-video communication, so long as the notary retained an electronic recording of the act for at least five years. The relevant provisions, codified at Va. Code § 47.1-2 and § 47.1-6.1, make Virginia the first US jurisdiction to treat remote notarization as a general-purpose tool rather than a carve-out for a specific transaction type.

Eight more states followed between 2017 and early 2020, most of them adopting the remote notarization sections of the Revised Uniform Law on Notarial Acts as amended by the Uniform Law Commission in 2018. Texas authorized online notarization in 2017 and the Secretary of State's rules took effect July 1, 2018. Nevada, Montana, and Minnesota followed with statutes taking effect in 2018 and 2019. Ohio's HB 94 took effect in September 2019. Indiana, Tennessee, Michigan, and Kentucky had laws on the books or taking effect by March 2020, and Washington's SHB 1589, signed in 2019, was scheduled to take effect October 1, 2020. That is the pre-pandemic map: nine states fully operational, one about to be.

Every one of those regimes requires the same rough stack. The notary has to verify the signer's identity through knowledge-based authentication (a credit-header quiz), plus credential analysis of a government-issued ID using a commercial platform. The session has to be recorded, audio and video, and retained for a statutory minimum, typically five to ten years. The notary's electronic seal has to be backed by a digital certificate that makes tampering with the completed document detectable. The fee limits mirror the in-person fee limits, typically in the low tens of dollars per act, with the technology markup passed through to the signer as a separate charge. None of this is cheap to stand up; it is why the vendor market consolidated around three or four platforms before most states had approved anybody.

The standing statutes are not interchangeable. Virginia permits a Virginia notary to notarize for any signer anywhere in the world as long as the document will be filed, recorded, or used in the United States. Texas limits its online notaries to documents for use within the US or governed by US law. Ohio requires the notary to maintain a surety bond and pass a specific course. Minnesota ties the online authority to a supplemental commission. A transaction that is cleanly notarized under Virginia's regime may fail under Ohio's; a lender that accepts a remote notarization from an Ohio notary may reject the same document from a Tennessee notary if its internal policy was written against a specific state's rules.

Seven weeks of emergency rulemaking

The permanent-regime map became irrelevant on March 18, when the first wave of shelter-in-place orders started making in-person notarization logistically impossible for anyone not already living with a notary. The federal response was immediate: Senators Kevin Cramer and Mark Warner introduced the Securing and Enabling Commerce Using Remote and Electronic Notarization Act of 2020 (the SECURE Notarization Act) on March 18, which would have amended 28 U.S.C. to require interstate recognition of remote notarizations performed under either a state-authorized regime or a federally specified minimum standard. The bill did not move. It is still sitting in the Senate Judiciary Committee in May.

In the absence of federal action, roughly forty governors, state bar associations, and secretaries of state cobbled together authority out of emergency-management statutes, inherent executive powers, and in a few cases actual legislation. The pattern was unusually compressed.

New York acted first. Governor Cuomo's Executive Order 202.7, issued March 19, suspended the in-person appearance requirement of New York Executive Law § 135-a and Real Property Law § 309-a, authorizing any New York notary to perform a notarial act through audio-video communication so long as the signer affirmatively represented being physically located in New York, the notary could reasonably identify the signer by personal knowledge or through ID presented during the call, the signer transmitted a legible copy of the signed document by fax or electronic means to the notary on the same day, and the notary separately notarized and returned the document. The order expressly did not require a commercial platform, a recording, or credential analysis. That is not a remote online notarization regime in the sense any of the ten standing states would recognize; it is a suspension of the physical-presence requirement, which is a different animal.

New Jersey took the legislative route. A3903, signed by Governor Murphy on April 14 and effective immediately, authorized remote notarization for the duration of the public health emergency declared under EO 103, with the authority to expire when the emergency ends. The statute, unlike New York's order, requires the notary to use "communication technology" that permits direct observation of the signer, requires identification through personal knowledge, a credible witness, or at least two forms of identity proofing, and requires the notary to keep an audio-video recording of the act for ten years. That is substantively closer to the standing regimes, with a sunset clause attached.

Pennsylvania moved by gubernatorial waiver. Governor Wolf's March 25 authorization through the Department of State permitted remote notarization for real estate transactions only, under conditions set by the Department. A broader bill (SB 841, as amended) expanding that authority to any notarial act for the duration of the emergency is on the governor's desk this week, subject to a department-set technology standard and recording requirement. Pennsylvania has been sitting on RULONA-based remote-notarization legislation since 2018; the pending bill is an emergency-scoped subset of what that permanent legislation would do.

Illinois Executive Order 2020-14, issued March 26, temporarily suspends the in-person requirement of the Illinois Notary Public Act, 5 ILCS 312/6-102, and permits notarial acts via two-way audio-video communication so long as the notary is physically located in Illinois, the communication allows direct interaction, the signer transmits a copy of the document to the notary on the same day, and the notary signs and returns it. Illinois, like New York, did not require a commercial platform or a recording. The order is good for the duration of the Gubernatorial Disaster Proclamation.

California has been the loudest holdout. Governor Newsom's March 21 executive order addressed several notarial and witness provisions but did not authorize remote online notarization generally; California law still requires physical presence before a notary, and the Secretary of State's guidance through April and May continued to direct Californians who needed documents notarized to either travel out of state, use a mobile notary with appropriate distancing, or send documents to a notary in a jurisdiction that recognized remote acts. The California Land Title Association and several bar sections lobbied for an emergency order; the administration declined, citing the state's specific identity-verification requirements and unresolved questions about jurisdiction.

The full 2020 emergency patchwork includes every state except roughly five holdouts. Alabama, Delaware, Maryland, Massachusetts, and a handful of others issued limited orders scoped to estate documents, real estate closings, or specific industries, while California, Oregon, and Georgia stayed closest to the pre-pandemic baseline.

The interstate recognition problem

The standing regimes contain explicit interstate-recognition provisions. A deed notarized in Virginia under Title 47.1 is valid in Ohio because Ohio R.C. § 147.51 and the UPA recognize out-of-state notarial acts performed under the law of the notarizing state. That is the backbone of how any of this works across state lines.

The emergency orders do not all have that backbone. Several of them, New York's EO 202.7 among them, explicitly speak only to the acts of New York notaries; they do not address whether another state's notary operating under that state's emergency order would be recognized in New York. Most receiving states will recognize an out-of-state emergency notarization under general interstate-comity principles, but title insurers have been uneven about it. Fidelity, First American, and Stewart published bulletins in April setting out which states' emergency regimes they would underwrite over; the lists were not identical, and a transaction that cleared one underwriter's bulletin would fail another's.

For entity formations and operating documents, this matters less than for real estate. An operating agreement does not need to be notarized in most states. A certificate of amendment filed with a secretary of state is typically not notarized at the filing stage; it is signed by an authorized person and relied on. Notarization sits on top of transfers of title: deeds, mortgages, vehicle titles, assignments of membership interests that a buyer wants recorded or escrowed. Anyone doing a deal that touches those is checking three documents at minimum right now: the originating state's emergency order, the receiving state's recognition rule, and the title insurer's bulletin.

RULONA and the permanent question

Before the pandemic, the Uniform Law Commission's Revised Uniform Law on Notarial Acts, with the 2018 remote-notarization amendments, had been adopted in some form by a growing minority of states. Pennsylvania, Minnesota, Indiana, Ohio, and others built their permanent remote-notary regimes on RULONA's framework. The ULC's case for uniformity was exactly the interstate-recognition problem now on display, and its drafting committee had anticipated much of the vendor market that now exists.

The pandemic accelerated the argument. Every state bar now has a working group drafting permanent remote-notarization legislation for the next session; the bar associations that were skeptical in 2019, California's among them, are quieter in May 2020 than they were last fall. The SECURE Notarization Act's prospects have improved, not because the politics of federalizing notarial practice have changed but because every state now has a constituency of title agents, estate-planning lawyers, and transactional attorneys who have spent two months navigating the patchwork and would prefer a single standard.

What does not yet exist, and may not for a session or two, is a permanent regime in every state that has been improvising. New York's EO 202.7 is extended repeatedly but will expire when the emergency does. New Jersey's A3903 has a sunset. Pennsylvania's pending SB 841 does too. The emergency rules work because everyone has agreed to let them work; when the emergency lifts, the underlying statute, which still requires personal appearance in most states, snaps back.

The interesting question for the second half of 2020 is not whether remote notarization survives the pandemic. The vendors will survive, because the demand curve is visible. The question is whether the country ends up with nine to fifteen permanent regimes and the rest reverting to in-person, or whether something closer to uniform adoption follows. Based on the legislative calendars now filling for January sessions, the answer looks like mostly the former in 2021 and maybe the latter by 2023. In the meantime, an operating agreement e-signed over Zoom and notarized under an executive order is a valid document today, conditional on an order that could be rescinded with thirty days' notice and a receiving state whose rule you have not yet read.

Related reading on Incorporator.org: the Secretary of State modernization update from February covers the state-by-state variance in filing infrastructure that is running on top of all of this.

Sources

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