This article, written by Jennifer Lyon, was originally published by NH Business Review and can be found here.
E-notarization began as a Covid stopgap but new law makes it permanent
A new state law went into effect in February allowing for electronic and remote notarizations. Early in the pandemic, the governor issued an emergency order from that allowed for a type of electronic notarization. The order was necessary to reduce in-person contact during the signing and notarizing of documents. Now that it seems that remote meetings will be a part of the “new normal” created by the pandemic, New Hampshire has made remote notarizations a permanent part of New Hampshire business practice as well. As of Feb. 6, the updated New Hampshire Uniform Law on Notarial Acts (RSA 456-B) allows notaries and justices of the peace to verify identity and signatures via videoconferencing platforms as well as accept electronic signatures. This bill brings the state into line with approximately 40 other states that have similar measures. Additionally, the Uniform Real Property Electronic Recording Act (RSA 478-A), also in effect this month, similarly modernizes conveyances and mortgages of realty.
During remote notarization, the notarial process remains the same, in that a signer appears before the notary to request a notarization and provides a signature, and the notary identifies the signer and completes a notarial certificate with an electronic notary signature and seal. There are certain requirements to ensure that the signatures will be legally binding:
- A notary who wishes to perform electronic/remote notarizations must notify the Secretary of State using a form that ensures he/she meets the requirements. The Secretary of State maintains a list of notaries that are approved to perform this service.
- The notary must be physically in New Hampshire, but the signers can be anywhere. With remote notarization, the signer and the notary, although not in the same location, satisfy the requirement of “personal appearance” before the notary through use of two-way audio-video technology. The signer and notary must be seen and heard at the same time, so a telephone call would not work; video capabilities are required.
- The notary will need to use a technology provider to meet the minimum technology requirements. The provider will need to record the audio-visual session and keep it for 10 years. The Secretary of State maintains a list of technology service providers that have filled out the required form to self-certify that their systems comport with state laws. This includes meeting industry standards set by the Mortgage Industry Standards Maintenance Organization, or MISMO.
- A notary must take care to verify the identity of a remote signer. If the notary knows the signer personally, or if there is the oath or affirmation of a credible witness to verify the identify witness, this can be satisfactory evidence. Without either of those methods, a notary must use a reputable company to verify the identity of the signer. Typically, the same remote technology provider will also offer identity-proofing services, which also must meet identity-proofing standards set by MISMO.
The proofing services typically use one of two methods. A knowledge-based authentication (KBA) service would ask the signer a set of questions that can be verified with their credit and financial history. A credential analysis service scans the signer’s identification to verify that it is not altered or fraudulent.
- The E-notarization provisions of the statute allow the signers and the notary to use electronic signatures in place of a traditional “wet-ink” signatures. This will typically utilize a pdf sent between the signer and the notary, and can include signatures in the form of typed names, digitized or scanned images of handwritten signatures.
- The statute requires that the notary’s signature sign by means of a digital certificate that meets “X.509” industry standards set by the private nonprofit standards body Direct Trust. The Secretary of State provides a list of accredited digital certificate providers, and typically the technology provider will also offer this service.
- There may be occasions when an entity requires a “wet-ink” notarial signature, and this can still be accomplished remotely with a bit more coordination. Depending on the requirements, the signer can either send a physical signed copy in the mail or a scanned copy to the notary. Then, through a remote notarization session the notary would verify that it is the correct document, verify the identity of the signer, and then sign and affix a seal by hand.
- The statute requires that, in addition to the technology service keeping a recording of the remote notarization for 10 years, the notary keep a journal entry, either written or electronic, for each remote notarial act for 10 years. This service may be offered by the technology provider as well.
Whatever method of identity verification and remote technology is used, it will be important to ensure that those methods are accepted for the services you need. Some transactions may have their own requirements.
The Uniform Real Property Electronic Recording Act also went effect last month, updating conveyances and mortgages of realty to allow E-notarization and remote notarization according to the new Uniform Law on Notarial Acts. It also allows for recording of property records in electronic form. With respect to real estate transactions, it is vital that you check with the title company to see if it will insure titles conveyed in accordance with RSA 478-A. Many title companies have their own standards for remote notarization and require the use of specific online notarization platforms. If you will be involved in real estate transactions, please be sure to confirm with the title company the remote notarization process that is required for both insurance and deed recording purposes. The updated Uniform Law on Notarial Acts also includes specific provisions for estate planning attorneys who drafted the estate planning instrument. The necessities of the pandemic created an opportunity to modernize the notarization practices of New Hampshire, and the updated Uniform Law on Notarial Acts presents a more efficient way to conduct business and keep a strong record of transactions.