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In the elder law practice, the signing of estate planning documents such as the power of attorney, trust or deed before a notary can be challenging. Given the age of clients, mobility issues, and the difficulty of travel, many clients are unable to come into the attorney’s office for the notarization.

With electronic legal research the norm and electronic filing mandatory in many cases, it should come as no surprise that the role of the notary is also subject to Internet innovation. The Commonwealth of Virginia has enacted legislation that allows its notaries to act outside of Virginia and also allows remote electronic notarization. In combination, these two changes portend a significant change to notarization in New York.

The history of notaries can be traced back for centuries to Roman Law and then through the ecclesiastical system. However, the process of notarization has changed little from its inception. A principal appears in person before a notary who authenticates their identity, confirms their understanding of the solemnity of the act and assures that they were acting freely. The principal then signs a physical document and the notary affixes a seal to memorialize the signing. The notary gives an assurance that third parties can rely upon the validity of the document.

The ubiquity of electronic records has led to the recognition of the authority of notaries to act upon electronic documents just as they can with paper documents. The development of notarization of electronic documents has not significantly changed the centuries old notarization process. The notary and the signer are still required to be in the same physical location at the time that the notarization of the electronic document occurs.

The real significant change is in the concept of the remote electronic notarization. Since the inception of notaries, it had always been an unquestioned presumption that the principal must “appear in person” before the notary. This had meant that the principal and the notary had to be in the same physical space. Remote electronic notarization is an historic change because the principal and the notary can be in different locations within the same state; in different states or in different countries at the time that the notarization is accomplished. With the reliability of live audio visual technology, the principal and the notary can act as though they were virtually in the same physical space.

How It Works

The principal first uploads an electronic document such as a power of attorney to a computer and then proves identity using programs such as Knowledge Based Authentication (KBA) to provide security. Most people are familiar with a version of this system that relies upon questions generated from public data (“Which of the following is not an address where you have lived?”). This is more reliable that the current system where an individual appears before a notary and displays a driver’s license to establish identity but the notary does not check the authenticity of the document against any data base.

A live, audio video computer conference connection is then made with the notary. The conference is recorded. The document is signed electronically and the notary affixes a seal to the electronic document in a manner that any tampering would be detectable. The notary then records the event in a journal.

Virginia Statute

First, the Virginia statute allows a Virginia electronic notary to act outside of the Commonwealth of Virginia.

Any notary commissioned pursuant to this title may likewise perform notarial acts outside the Commonwealth, where such notarial acts are performed in accordance with this chapter…

An electronic notarial act performed in accordance with this chapter shall be deemed to have been performed within the Commonwealth and is governed by Virginia law.

Va. Code Ann. §47.1-13

The statute could be read to permit a Virginia notary to travel to another state and notarize a deed to be filed in the other state. The statute does not contain language limiting the authority of the notary to act extraterritorially only for documents intended to be used in Virginia. The scope of this provision can be broadly compared to the authorization of Virginia notaries to act as national notaries.

Second, Virginia was the first state to allows remote electronic notarization. “In the case of an electronic notarization, ‘satisfactory evidence of identity’ may be based on video and audio technology … that permits the notary to communicate with and identify the principal at the time of the notarial act … .” Virginia explicitly allows electronic notarization when the principal and notary are physically in separate locations if audio visual means are used.

The combination of these two statutory provisions have led to claims by private companies that a Virginia notary can perform a notarization in another state that is valid throughout the United States.

All fifty states and the District of Columbia have statutory provisions in place that provide for recognition of online electronic notarial acts performed by Virginia e-notaries under Virginia law.

SafeDocs, www.safedocs.com.

In general, a document notarized properly in another state is given full recognition in another state. However, in the context of remote notarization great caution must be taken. Whether the remote electronic notarization is recognized in another state is an issue that will only be clear over time. Iowa, for example, defines “personal appearance” as physical presence and specifically excludes electronic appearance. Iowa Code Ann. §9B.2.10. The Ohio Attorney General and California Secretary of State have issued consumer alerts warning about remote electronic notarization. But four states—Oklahoma, Washington, Nebraska and Indiana—currently have bills pending to authorize remote electronic notarial acts.

Montana Statute

Montana was the second state to allow remote electronic notarization. Mont. Code Ann. §1-5-603(7)(a). The Montana statute is less problematic than the Virginia statute because the remote notarization can only take place within the state of Montana. There is no authority for a Montana remote electronic notary to act outside of that state. Further the Montana statute requires that the principal be a legal Montana resident. This is a much more modest approach to the question of remote electronic notarization.

Conclusion

The status of remotely notarized electronic documents is clearly in its infancy. Its acceptance is likely to be tested when a document is notarized remotely by a Virginia notary, with a principal outside of Virginia, and is offered in another state. It may require legislation or judicial opinion to resolve this issue.