This article is the second of a multi-part series on electronic signatures and remote online notarizations.
As the commercial world shifts to conducting all business remotely in light of the ongoing COVID-19 pandemic, there is a heightened awareness of the strictures required for a document to be notarized. Remote notarization involves two related but distinct issues: (i) the notary's remote administration of the oath or acknowledgment, and (ii) the notary's electronic signature. In New York—before the current crisis—notaries were permitted to use electronic signatures in lieu of wet ink, but the signer still had to "personally appear" before the notary. That changed dramatically with Governor Cuomo's Executive Order 202.7 on March 19, 2020.
New York's Electronic Signatures and Records Act (ESRA) went into effect two decades ago on March 26, 2000. Following the then-novel trend started by the Uniform Law Commission's Uniform Electronic Transactions Act (UETA), ESRA mandated that "[t]he use of an electronic signature shall have the same validity and effect as the use of a signature affixed by hand." N.Y. State Tech. Law § 304. It also authorized government entities—notably, county clerks—to accept and receive electronic signatures. N.Y. State Tech. Law § 305. The administrative regulations promulgated under ESRA specifically contemplate the use of electronic signatures for real property transactions. See 9 NYCRR 541.1(g).
Importantly, New York's Real Property Law sets the standard for all notarized documents in the state. Section 309-a requires that all acknowledgments "conform substantially" with the sample acknowledgment contained in that section. The sample acknowledgment requires that the signer "personally appear" before the notary. N.Y. Real Prop. Law § 309-a.
Beginning with Virginia in 2012, several states enacted laws dispensing with the personal appearance requirement. These states allow "remote notaries" to administer oaths over an interactive videoconference, and to affix either an electronic signature or an ink signature to a copy of the signed document. See, e.g., Virginia Code § 47.1-2 ("[i]n the case of an electronic notarization, 'satisfactory evidence of identity' may be based on video and audio conference technology . . ."). New York had not implemented a "remote notary" law, and did not accept out-of-state notarizations that did not "substantially conform" with the sample acknowledgment in Section 309-a. See Midfirst Bank v. Agho, 121 A.D.3d 343, 348-50 (2d Dept. 2014).
Executive Order 202.7 has changed all of that, at least for now. The Executive Order allows Notaries to perform any "notarial act" via live videoconference. Naturally, there are certain procedures to follow. During the videoconference, the signer must present valid photo identification. The videoconference must be live and interactive: prerecorded videos of the act of signing are not allowed. Also, the signer must confirm that he or she is physically situated in New York. The Executive Order, by omission, leaves intact the stricture that the notary must be physically present in New York. N.Y. Pub. Ofc. Law § 135 ("[e]very notary duly qualified is hereby authorized within and throughout the State . . ."). To complete the notarization process, some final steps are needed. Having signed the document on video with the notary watching, the signer next must transmit by fax or email the signed document to the notary. The notary then affixes his or her signature and required information—the Order does not distinguish between ink and electronic means—and sends it back to the signer. Though a significant change, this is all eminently sensible.
While Executive Order 202.7 allows remote notarization only through April 18, 2020, New York's business community will not want to go back. Perhaps one small silver lining to the current pandemic is that this interim measure is undoubtedly New York's first step toward allowing remote notarization as a permanent fixture.