Remote Notarization Becoming Permanent
As many of you know, last year at the height of the COVID Pandemic, the legislature passed a law that allowed for remote notarization. These provisions are found primarily in NCGS 10B-25 Article 3 of NCGS Chapter 10B. These provisions were always intended to be temporary in nature, expiring on March 1, 2021, however they were very recently extended and will remain in effect through the end of 2021. . .or at least until they are replaced by a permanent Remote Notarization Statute. A permanent Remote Notarization statute is in the works and some form of it will likely be passed into law sometime this Summer. That pending statute is the substance of this article. The proposed RON revision to Chapter 10B is currently in draft format. Once passed into law, it will replace the current emergency video notarization provisions with a new Article 4. I will highlight and summarize some of its major provisions here:
· The status expands the definition of “in the presence of” to include interacting with another individual by means of communication technology or electronic device.
· The new bill would allow remote notarizing in North Carolina for principals signing anywhere in the United States, so long as the remote notary was located in North Carolina. The principal can sign anywhere. There is no express prohibition in the new bill against a principal signing outside of the United States.
IDENTIFYING THE PRINCIPAL
· The remote online Notary shall use “identity proofing” to help confirm the identification of the individual.
· “Identity proofing” refers to a process or service through which a third person provides the Notary Public with a means to verify the identity of an individual through review of personal information from public or proprietary data sources. Examples of identity proofing include, but are not limited to, dynamic knowledge-based authentication, device-based identity verification, and biometric verification.
· “Dynamic knowledge-based authentication” means a process to identify a person based upon questions likely to be known only by the person and that has at least the following security characteristics:
- The person is presented with five or more questions with a minimum of five possible answer choices per question.
- Each question is drawn from a third-party provider of public and proprietary data sources and is identifiable to the person’s social security number or other identification information, or the person’s identity and historical events records.
- Responses to all questions are made within a two-minute time constraint.
- The person answers a minimum of 80 percent of the questions correctly.
- The person may be offered an additional attempt in the event of a failed first attempt.
- During any second attempt, the person is not be presented with more than three questions from the prior attempt.
· Before performing remote online notarial acts, a Notary shall:
- Register with the Secretary of State;
- Identify the credential analysis and identity proofing technologies the Notary public intends to use;
- Provide proof of successful completion of a course of instruction of least two hours approved by the Secretary of State and successful passing of an examination of this course,
· A Notary who performs a remote online notarial act shall record information about the notarization in a journal that is the exclusive property of the Notary, which journal shall be retained by the Notary for at least 10 years after the last remote online notarial act chronicled in the journal.
· A Notary must take reasonable steps to ensure that the communication technology used is secure from interception from an unauthorized third-party during transmission between participants involved in the notarial acts.
· The initial draft of the bill assigned liability to third party vendors that failed to meet the required standards, or to otherwise maintain the security of a transaction or properly establish the identity of a party where the services of the vendor had been used in substantial accordance with the reasonable instructions of the vendor of such services. The most recent draft of the bill changes this and assigns liability for an unlawful remote online notarization rest to the Notary public. The new bill also gives any “aggrieved person” the right to challenge a document recorded under remote online notarizing.
· In performing a remote online notarial act all of the following components shall be attached to, or logically associated with, any electronic document by the Notary, all of which shall be immediately perceptible and reproducible in the electronic document to which the Notary’s electronic signature is attached:
- The Notary’s name, state, and county of commissioning exactly as stated on the commission issued by the Secretary;
- The words “Remote Online Notarization by Electronic Notary Public Utilizing Communication Technology”;
- The words “State of North Carolina”;
- The expiration date of the commission;
· While it is anticipated that documents with an electronic acknowledgment will be filed electronically, there is a procedure in the statute for printing a paper document and recording it in the customary manner
· A paper or tangible copy of an electronic document that a notary public has certified to be a true and correct copy satisfies any requirement of law that, as a condition for recording, the document:
- Be an original or be in writing;
- Be signed or contain an original signature, if the document contains an electronic signature of the person required to sign the document; and
- Be notarized, acknowledged, verified, witnessed, or made under oath, if the document contains an electronic signature of the person authorized to perform that act, and all other information required to be included.
This pending legislation will significantly change how acknowledgments are made in our fast-paced, digital world and could impact how closings are conducted in North Carolina. Many of you have heard me espouse the virtues of RELANC in the past and know that I am the Treasurer of the organization. RELANC has a seat at the table as it relates to many of the pending legislation that impact consumers of real estate services, including this one. I encourage you to join RELANC
and let them know if you have any thoughts about this or any other pending legislation so that your voice may be heard.