QUESTION:     ARE ELECTRONIC NOTARIZATIONS LEGAL?

ANSWER:        ELECTRONIC NOTARIZATIONS ARE LEGAL IN MOST STATES.

Electronic notarizations have been legal in Arizona for years, but they still required the signer to physically appear before the notary for the electronic signature and the electronic notarization of documents.

Remote electronic notarizations originally were scheduled to become effective from and after June 30, 2020.  However, on April 8, 2020, in partnership with Secretary of State Katie Hobbs, Governor Doug Ducey issued an Executive Order allowing Arizonans to get documents notarized remotely, while ensuring secure and effective verification processes starting April 10, 2020.

This measure is consistent with Remote Online Notarization, a law passed that allows signers and notaries to meet virtually that  was to take effect July 1, 2020. The Governor’s Executive Order accelerates this timeline.

The basics of electronic signatures and electronic transactions.

The Electronic Signatures and Global and National Commerce Act (E-SIGN) became the law in the United States on June 30, 2000.  E-SIGN provides a general rule of validity for electronic records and signatures for transactions in or affecting interstate or foreign commerce.

The Uniform Electronic Transactions Act (UETA) approved by the National Conference of Commissioners on Uniform State Laws in 1999 was enacted in Arizona in 2000.  UETA applies only to transactions between parties each of which has agreed to conduct transactions by electronic means.


What is an electronic signature?

Under the E-SIGN Act the term “electronic signature” means an electronic sound, symbol, or process, attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record.  Although the definition of “electronic signature” is essentially the same in UETA, you should consult your specific state statutes for definitions of electronic signature.

For example, Arizona Revised Statute § 41-351 generally says:

“Electronic signature” means an electronic method or process that through the application of a security procedure allows a determination that the electronic signature at the time it was executed was all of the following:

  1. Unique to the person using it.
  2. Capable of verification.
  3. Under the sole control of the person using it.
  4. Linked to the electronic document to which it relates in a manner so that if the document is changed the electronic signature is invalidated.

That is different than the definition of “electronic signature” found in Revised Uniform Law on Notarial Acts (2018) that says:  “‘Electronic signature’ means an electronic symbol, sound, or process attached or logically associated with a record and executed or adopted by an individual with the intent to sign the record.”  But the more detailed definition of “electronic signature” in A.R.S. § 41-351 is the definition used in Arizona’s version of the remote electronic or online notarization act.

Arizona’s current electronic notarizations under A.R.S. §§ 41-351 and 41-352. 

Arizona’s definition of “electronic signature” is quoted and discussed in the prior section.  That definition will not change on July 1, 2020.

The rules for “electronic notarizations” are set forth in A.R.S. § 41-352 which says that notarial “commissions, duties and acts. . . may be performed electronically.”  Moreover, notary publics “may accept documents signed with an electronic signature.”  The Arizona Secretary of State was directed to adopt rules for “secure and feasible” electronic notarizations.

On July 1, 2020 Arizona law will provide definitions, rules and standards, and the specifics for “remote online notarization.”

Practical advice for electronic notarizations.

First, if your transaction involves title insurance, check with the title company to see if the title insurance will include an exception for electronic notarization.  Not all title companies will issue title insurance based on electronic notarizations of signatures.

Check the law of your particular state or jurisdiction to make sure electronic notarizations are legal and also check the effective date of any recently enacted laws.

Make sure you understand the difference between electronic notarization and remote online notarization and be sure which method is currently legal and valid in your state.

Keep up with rapidly changing developments! 

For example The Securing and Enabling Commerce Using Remote and Electronic Notarization Act of 2020 (SECURE Notarization Act) would allow immediate nationwide use of remote online notarizations with certain minimum standards.  The SECURE Notarization Act would authorize every notary in the United States to perform remote online notarizations using audio/video communications and tamper-evident technology for interstate transactions.  The SECURE Notarization Act has bipartisan support, so the state of the law on a national level could be changing rapidly.

As always, please contact any of the Gammage & Burnham lawyers if you have questions about electronic transactions.

View the Executive Order HERE. Feel free to contact me with any concerns.

Mike

Michael R. King  Gammage & Burnham, Attorneys at Law
mking@gblaw.com  602-256-4405

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