Remote Online Notarization: A Critical Tool to Ensure Business Continuity During COVID-19
- Companies across the United States are having to adjust their business continuity plans to address unique problems caused by the current COVID-19 crisis. A key piece of those plans should be the incorporation of Remote Online Notarizations (RONs).
- RON laws give businesses access to a critical tool in today's climate of quarantines and isolation, allowing businesses to execute critical documents with clients, vendors and government entities. They eliminate the need for the notary to be in the physical presence of the signer, while providing a tamper-proof electronic version of the document.
- Currently, 23 states have RON laws, although some key states such as New York and California do not — yet. There are, however, active bills in both states, along with 12 others, and momentum is growing. Importantly, when RONs are conducted in a state allowing for RONs, the document should have the same force and effect in jurisdictions that do not yet have them in place.
Update: Since this alert was published, New York Gov. Andrew Cuomo issued an Executive Order, effective March 19, 2020, and continuing through April 18, 2020, that New York will permit virtual notarizations. Other states – including Connecticut (through an Executive Order effective March 23-June 23) and New Hampshire (through an Emergency Order effective March 23 and expected to last through the end of the COVID-19 crisis) – are also allowing virtual or modified versions of RONs. Federal legislation to enact a national RON law has also been introduced, along with other new legislation that is being considered and adopted in various jurisdictions. Reach out to Partners Josh Prever and Kwamina Williford, Of Counsel Bob Jaworski or Associate Brian Goodrich of Holland & Knight's Remote Online Authorization Team to determine if RONs are available for your needs.
Companies across the United States are having to adjust their business continuity plans to address unique problems caused by the current COVID-19 crisis. A key piece of those plans should be the incorporation of Remote Online Notarizations (RONs). Currently, 23 states have RON laws. These laws give businesses access to a critical tool in today's climate of quarantines and isolation. RONs allow businesses to execute critical documents with clients, vendors and government entities despite the notary and signer being unable to physically be in the same room at the same time.
What Exactly Are RONs, and How Can They Help Your Business During the Current Health Crisis and Beyond?
RON laws allow notaries to electronically and remotely notarize documents. They eliminate the need for the notary to be in the physical presence of the signer while providing a tamper-proof electronic version of the document. In a world where freedom of movement is being restricted and notaries and signers are unable to be in the same place, RONs provide an additional avenue to get the documents your business needs notarized — such as contracts, government permits, financial forms and others — even when the signer is at home or otherwise unable to appear in person.
But Is It Safe?
RONs rely on powerful technology to prove the identity of the signers and use real-time video and audio to communicate between the notary, signer and any necessary witnesses. In many ways, the identity-proofing technology that is used provides greater confidence that the signers are who they say they are and also provides a digital record of the signing process through a recording. As with any new process, however, businesses must, of course, do the work before implementing to ensure compliance with laws and regulations and the integrity of electronic files. Whenever technology is used, risks can emerge, but these risks can be mitigated with due diligence.
Will Your Business Want to Use RONs After the Crisis Is Over?
As businesses begin implementing their business continuity plans, start using RONs and see what a valuable tool they are, it is likely that when the current crisis subsides RONs will become a fixture of business as usual. Because they are done remotely and can be done on your schedule and often times on demand, RONs have the ability to offer a number of efficiency gains post-crisis. Accordingly, implementing them and reducing the strain on your business now will lead to improved processes tomorrow.
What if My State Does Not Allow RONs?
While it is true that almost half of the states in the country allow for RONs, some key states such as New York and California do not — yet. There are, however, active bills in both states, along with 12 others, and momentum is growing. Importantly, even though not every state has RON laws, when RONs are conducted in a state allowing for RONs, the document should have the same force and effect in jurisdictions that do not yet have them in place. This is because the state where the notarization is being conducted controls. One potential exception, however, may be trust and estate documents.
What Will Employees Who Are Already Notaries Need to Do to Start Performing RONs?
If your company employs notaries, most states will require them to be trained and otherwise authorized to perform RONs. Getting your current notaries trained and authorized during the immediate crisis, may, however, be impractical. Keep in mind that even if you are conducting RONs in-house, you may still need to partner with an approved third-party vendor to ensure continuous two-way video and audio, recording, creation of tamper-evident documents and to meet other requirements that are noted below. Given other numerous challenges your company may be facing during the crisis, it may be easier to leverage existing third-party platforms. These third-party platforms are operated by vendors who already have processes in place, along with employees who are trained and authorized to conduct RONs. Therefore, they may serve as the path of least resistance for implementation. In many cases, enterprise-level contracts can be entered into for large corporations and can help ensure priority access, while smaller companies can access these services for one-off documents.
What Are Some of the Key Requirements for RONs?
Although the process has some variation among the 23 states with RON laws (13 of these states have both regulations and laws in place allowing for RONs), a general outline of how RONs are conducted is below.
- They must be conducted in real time with continuous audio and visual feeds.
- The transaction must be recorded.
- The signer's identity is proven using approved ID software tools and correctly answering four to five background questions (i.e., where the signer has lived, car loan details and other personal information) within a specified period of time (often two minutes).
- The document is signed and notarized, and the electronic original is "tamper-evident" (i.e., cannot be altered without showing that it has been modified).
- The notary block states that it was notarized remotely, there is a log entry detailing the notarization and the notary keeps the log and video recording (generally between five and 10 years).
What Happens After the Signing Is Completed?
For companies that already sign documents electronically, the process will be familiar, as it is similar to electronic document signing platforms already widely in use. When the signing and notarization are completed, an electronic version is sent, along with the video recording and transactional history of the signing. The electronic document serves as the original, and if any changes are made to it after it is signed, it will be clearly marked.
What Is Next?
Businesses are often required to adapt during a crisis. While everyone hopes that this global health crisis will be over quickly, companies should adopt RONs as part of their business continuity plans so they can continue executing and notarizing mission critical documents. Once the crisis passes, RONs may very well become a part of business as usual. Is your business ready?
For more information on RONs and how they can help your company navigate the current crisis and prepare for the future, contact the author or another member of Holland & Knight's Remote Online Notarization Team, including Partner Kwamina Williford, Of Counsel Bob Jaworski and Associate Brian Goodrich.
DISCLAIMER: Please note that the situation surrounding COVID-19 is evolving and that the subject matter discussed in these publications may change on a daily basis. Please contact the author or your responsible Holland & Knight lawyer for timely advice.
Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.