Remote Electronic Notarization Inches Closer to Reality in North Carolina
July 1st Looms as Unlikely Start Date to RENs.
Transactions are increasingly occurring in a solely electronic format. Many real estate purchases begin with signing the contract with electronic signatures through platforms such as DocuSign, signNow, AdobeSign, and others. Next, buyers are very likely to complete their loan applications online with electronic signatures captured within a lenders’ loan application web portal. So when the actual closing arrives, parties are sometimes surprised to hear that they must appear in person for a closing in order to sign at least some documents with "wet ink" signatures in front of a notary public. Wet ink notarized signatures also remain the norm for car titles; estate planning documents such as wills, trusts, and powers of attorney; health care advanced directives such as living wills and health care powers of attorney; and sworn affidavits to be used as evidence in judicial proceedings.
During the pandemic, with in person activities restricted, North Carolina enacted a law allowing emergency video notarization (EVN). The process allowed the notarization of documents with the notary and signer being in communication over a video connection. However, in order to provide adequate safeguards, the process proved very cumbersome. The signing party and the notary both had to be present in North Carolina. After signing, the signer had to send a fax or scan of the signed document to the notary, and then mail the original to the notary. Upon receipt of the original, the notary had to compare the original to the fax or scan to verify they were the same. After verification, the notary could sign and affix their notarial seal. Whenever I offered this as a solution in my practice, the signer declined and made other plans to sign appropriately.
Following a brief period in which emergency video notarization expired, the North Carolina General Assembly re-authorized it, and also passed legislation allowing for Remote Electronic Notarization (REN). The legislation really just outlined the basics and instructed the North Carolina Secretary of State to go through a rule-making process to create all the details of how it will work. To date, the Secretary of State has issued two requests for comments on issues that need to be addressed in the final rules. The issues are very technical, dealing with such things as how to verify the technology of on-line notarization platforms, how to tell if audio and video communication are secure enough, and how to verify the identity of the remote signer.
What Happens on July 1?
When the North Carolina General Assembly authorized REN, it set a deadline of July 1, 2023, for the North Carolina Secretary of State to begin rulemaking to implement REN, and further stated that no temporary or permanent rule could be effective prior to that date. Many believe July 1 is the date REN can begin, but that will not be possible. Although the Secretary of State has begun the rulemaking process, there is no set date for when the process will be complete so that e-notaries can begin using REN.
Right now, e-notaries may conduct in person electronic notarization with both the signer and the notary present in the same location using electronic signature and electronic notary seal technology. I question the utility of in-person electronic notarization because I have never been asked to use it in my practice. A number of my colleagues have shared with me that they obtained their e-notarization credential five or more years ago and have never been asked to use it. Until July 1, 2023, under the EVN law, there is a form of REN available in North Carolina as already outlined in this article.
In conclusion, REN is coming slowly to North Carolina, and, in my opinion, the current e-notarization options are so cumbersome as to be rarely used.
- For those interested in the REN rule-making process, here is a link to an article from the N.C. Secretary of State’s Office with more details and further links:
- For those interested in current EVN, here is a video presentation from the N.C. Secretary of State’s Office with instructions on how the process works.