On Dec. 23, New York Gov. Kathy Hochel signed SB 1780/AB 399B, which will allow notaries in the state to perform remote notarizations for paper and electronic documents with the passage of the legislation and amendments agreed upon by the legislature and governor. Industry members are now preparing for the implementation of the rule.
The justification for the bill states, “Every year, hundreds of millions of documents are notarized in the United States: wills, mortgages, citizenship forms. Yet, despite the increasing number of notarizations that occur annually, the industry has not adapted to societal changes and technologic advance notarization still requires people to be physically present in front of a notary public, despite new technology that would allow for the same security over video and audio conference calls.
“This legislation is not merely for convenience; Electronic notarization would allow homebound citizens to access notarial services and would allow working people to have their documents notarized without losing wages for lost working hours spent at an in-person notary public,” the justification continued.
Chris Hultzman, vice president, corporate underwriting First American Title Insurance Co., noted, “The state of New York’s temporary executive order allowing remote notarization, which was issued at the onset of the pandemic, expired in June 2021, so remote notarization was unavailable in New York for the last several months. Passing the legislation and signing the bill into law was important because home buyers and sellers in New York can now execute and notarize important legal documents remotely in a safe, secure, and legally compliant manner as they move forward with their real estate transactions. Moreover, New York became the 39th state to pass RON legislation, which aligns with existing laws across several other states, demonstrating momentum for broader acceptance of RON and supporting the digital transformation of title and settlement.”
The bill had been in the works for a couple years. Bob Treuber, executive vice-president, New York State Land Title Association (NYSLTA) noted, “NYSLTA first met with Assemblymember Rozic’s staff and Assembly Central Staff in April of 2019. Our RON Committee created a set of critical factors that we believed were necessary for a successful functional remote notary bill in N.Y. There were factors such as MFA, papering out, journaling, etc.
“Over the next year we met with a number of legislators and staffers to advocate for the inclusion of the critical factors,” he continued. “We enlisted the assistance of a national expert on notarial law and remote notarization legislation,” Hultzman said.
“NYSLTA also worked in coalition with other professional groups, the NYMBA and the NYCUA,” DeAnna Stancanelli, co-chair of the New York State Land Title Association (NYSLTA) Advocacy Committee and Principal, National Granite Title Insuranc Agency, Inc. stated. “Through our ALTA relationship, we were able to share other states’ experience with legislating RON. We met with N.Y. Bar Association members to present our position on the critical factors.”
Now that is it has been passed, what’s next? In a release supporting the bill’s passage, NYSLTA noted as soon as the Legislature passes and the governor subsequently signs chapter amendments to the remote online notarization bill, a temporary remote online notarization process for paper and electronic documents similar to the rules applicable under the COVID-19 Executive Order will be put in place. This temporary remote online process will be officially replaced by the new, permanent and robust remote online notarization law on Jan. 31, 2023.
“With the imminent passage and signing of a chapter amendment, RIN will become authorized immediately,” Treuber said. “The business community should be aware that the secretary of state will be developing regulations and guidance for true electronic, remote notarization. The process is scheduled for completion on Jan. 31, 2023 at which time notaries will have to register with the secretary of state to provide RON services.”
What should industry members to prepare for implementation of the bill?
“Title and settlement professionals in New York should start by reviewing the legislation and creating a plan for operationalizing remote notarization,” Hultzman said. “Identify any new technologies your business will need to offer remote notarization and the staff that are best suited to be early adopters. Engage your customers to determine whether or not they want to be early adopters or develop a pilot test. It’s important to work through the mechanics of a remote notarization with your customers, so both sides understand the process. You’ll also want to establish internal guidelines and identify any necessary changes to process requirements before implementing remote notarization.”
Ryan Cabrita, information security officer, Gulotta Grabiner Law Group, agreed. He also provided some additional steps to take, including asking how data is protected and stored. Is the data encrypted both at rest and in transit? How are users authenticated?
He also said it was important to understand how long the provider is going to be storing the data. Will you have to migrate that data out of your environment.
“If your records are all digital, you will need to consider how you will store them for the minimum required time,” Cabrita stated. “Storing videos and tamperproof digital files will require a large amount of digital storage, all of which should be stored securely with the accepted standard for data at rest.
“Furthermore, it is vital to keep up to data with all the laws and regulations surrounding remote online notarization because they are going to be continuously changing,” Cabrita said. “It’s a new technology, a new system in place that is going to be evolving each month that new states pass it, or as they tweak their existing laws. It’s going to be something we really need to keep on top of.”