Remote Online Notarization (RON) is a hot topic in the real estate community right now. This is a result of purchasers and sellers wanting a more flexible closing process in today’s busy world and the current landscape of the real estate market.
The need for remote options and alternatives to in-person document signings and closings has been driven by the pandemic in an effort to conduct transactions safely and compliantly.
This has led many states to pass legislation to allow for remote online notarization or other laws that reduce the execution requirements for documents. While each state is taking different approaches to the changes, nearly every state is at least considering changes to the requirements for document execution or is seeing an increase in utilizing existing remote online notarization laws. This article looks at significant changes, updates, and the legislative process in several of PLG’s footprint states as the passage of remote online notarization or other document execution laws continues to grow.
Padgett Footprint State: IndianaEarlier this year, the State of Indiana passed House Bill 1056 which removed the witness provision for recordable documents. Witnesses are no longer required for proper execution for recordable documents in Indiana. Now, only a notary is required for the document to be recordable. This new statute reduces the technical requirements for proper execution of recordable documents. The legislature passed the law to avoid issues with documents being challenged for technical deficiencies and also made the statute retroactive to maximize the benefits, so it applies to previously recorded documents as well. The State recognized the benefit of lessening the procedural requirements for executing recordable documents to help stabilize and foster the real estate industry in Indiana.
Padgett Footprint State: Florida
The State of Florida extended an Administrative Order allowing for notaries to administer oaths remotely by audio-video technology. This is in direct response to the pandemic and was issued to allow for more flexibility by not requiring notaries to be physically present with the signing party. This is a temporary solution, but it would not be surprising to see similar legislation presented in future sessions to make this type of requirement permanent.
Padgett Footprint State: Georgia
Georgia has a similar Emergency Order that has been extended again due to the pandemic. The Governor and Supreme Court of Georgia have reduced the in-person execution requirements for recordable documents. Notaries are allowed to administer oaths and witness document execution via two-way audio-visual technology similar to Florida. This is referred to as remote in person notarization in Georgia and has gained a lot of attention. A proposed statute to make remote online notarization allowable in Georgia was tabled following input and discussion from several organizations during the previous 2021 legislative session. However, it is expected for a similar statute to be presented again in 2022 and that some version will pass soon. Many in the real estate industry believe that a law making remote in person notarization allowable will be passed next session at a minimum.
Padgett Footprint State: Texas
Remote online notarization is already allowable under Texas law. However, there has been an increase in usage of remote online notarizations as a result of the pandemic. Most title insurance companies will insure when remote online notarization is used, but they may have additional requirements. It is important to communicate with the local underwriters for any specific additional items that are required to insure a transaction where some or all of the documents were executed via remote online notarization.
As the trend towards wider acceptance of RON grows, we at PLG anticipate any states without remote online notarization to explore and pass new statutes allowing for changes to their current document execution requirements. States like Florida and Georgia will likely extend their respective orders to allow for temporary changes, so it is very important to remain well-informed for any changes to the requirements for all states. PLG attorneys and our team at Padgett Closing Services will continue to monitor existing orders, newly enacted statutes, and proposed statutes regarding remote online notarization and document execution standards.