Alerts and Updates
Use of E-Signatures, E-Notarizations and Remote Notarizations to Close Transactions Amid the COVID-19 Outbreak
March 20, 2020
e-notarizations are widely regulated by federal and state law as well as county rules and regulations.
Following the coronavirus (COVID-19) outbreak, businesses and institutions have taken sweeping preventative measures to restrict or eliminate in-person meetings and gatherings. To prevent further interpersonal spread of the virus while carrying on scheduled transactions, businesses should understand the current legal landscape governing electronic signature, electronic notarization and remote notarization laws, regulations and issues at play.
As of March 20, 2020, federal and state lawmakers have enacted or are considering executive or legislative action to authorize or further expedite e-signatures, e-notarizations and remote notarizations. Federally, Congress is considering the Securing and Enabling Commerce Using Remote and Electronic (SECURE) Notarization Act of 2020. If passed, the bill will authorize electronic and remote notarizations and establish minimum standards for transactions that affect interstate commerce. The legislation, as introduced, would authorize every notary in the United States to perform remote online notarizations (RON). The current legal framework permits states to implement their own RON standards.
At the state level, New York and Connecticut, through executive action, have authorized the use of remote notarizations using Skype, FaceTime or other similar real-time audio-video communications systems. By order of its Supreme Court, Florida has also taken similar measures to permit remote notarizations. Georgia is currently considering the authorization of remote notarizations.
As the law currently stands, e-signatures and e-notarizations are widely regulated by federal and state law as well as county rules and regulations. When federal law applies to the transaction, e-signatures are governed by the Electronic Signatures in Global and National Commerce Act (ESIGN Act). The ESIGN Act dictates that e-signatures hold the same legal status as a written hard copy or ink signature would. In transactions where state law applies, some form of the Uniform Electronic Transaction Act (UETA) will govern in most states and the District of Columbia. Similar to its federal e-signature counterpart, UETA states that e-signatures form a legally binding relationship just as a hard copy or ink signature would. Presently, UETA has been adopted in every U.S. state except New York, Illinois and Washington. Importantly, the SECURE Notarization Act will not preempt state data privacy laws.
Unlike e-signatures, e-notarizations take two distinct forms. First, e-notarization is when documents are signed and notarized with electronic signatures in electronic form. All other elements of a traditional paper notarization apply to electronic notarization, including the requirement for the signer to appear physically before the notary. Second, remote notarization occurs where the signer personally appears before the notary at the time of the notarization using audio-visual technology over the internet instead of being physically present in the same location.
In addition to the aforementioned actions taken by New York, Connecticut and Florida, 22 states have already passed remote notarization laws. In the following 12 states, remote notarization legislation has taken effect and notaries are currently authorized to perform remote notarizations: Idaho, Kentucky, Minnesota, Montana, Nevada, North Dakota, Ohio, Oklahoma, South Dakota, Tennessee, Texas and Virginia.
Please note that the laws and regulations vary widely based upon jurisdiction (meaning, among other things, that even if a state allows some version of e-notarization, it may not accept an e-notary from another state), local law, the transacting parties and the industry in which the transaction takes place. It is advised to consult experienced local counsel before taking action. Duane Morris has prepared a table summarizing the remote notarization laws of each state.
About Duane Morris
Duane Morris has created a COVID-19 Strategy Team to help organizations plan, respond to and address this fast-moving situation. Contact your Duane Morris attorney for more information. Prior Alerts on the topic are available on the team’s webpage.
For More Information
If you have any questions about this Alert, please contact Meagen E. Leary, David R. Augustin, any member of the COVID-19 Strategy Team or the attorney in the firm with whom you are in regular contact.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.