Remote E-Notary (REN) Remote Online Notary (RON)
The Timeline
- REN was first introduced in 2000
- REN recognized by National Association of Secretaries of State (NASS) in 2006
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First states to sign REN into law
- Virginia – 2011
- Montana – 2015
- Texas – 2017
- NASS revised RON standard in 2018
- Today, 33 states have some form of RON signed into law
- Approximately 16 states currently have authorized RON due to COVID
Source: National Association of Secretaries of State
During the last 18 months, among all of the guessing and rumors, there was only one thing you could count on: expect the unexpected.
Through this period of non-stop curveballs, two developments have flown under the radar, but may have a significant impact on the real estate landscape. The first is the New Jersey legislature’s passing of A1649, commonly known as “Daniel’s Law,” in an effort to protect the addresses and telephone numbers of judges, prosecutors, and law enforcement personnel. The second development is New Jersey’s passing of Assembly Bill No. 4250, permanently paving the way for remote and electronic notarization to be recognized in New Jersey. While the respective state, county, and municipal offices have yet to fully implement either of these pieces of legislation, the potential consequences of their passing can have significant ramifications on the real estate industry.
Daniel’s Law
Daniel’s Law came to pass as a response to a 2020 incident, where the family of US District Court Ester’s Salas was attacked by a disgruntled individual who felt aggrieved by a case decided by the judge. Tragically, Salas’ son, Daniel, was killed in the attack. Understanding the need to protect public service officials such as judges, prosecutors, and law enforcement officers, the NJ legislature passed A1649 and the US Congress is considering a similar bill. One impactful aspect of the bill is to direct county clerks and registers to redact personal identifying information (i.e. addresses), from those records that pertain to protected individuals.
While Daniel’s Law is unquestionably well-intentioned, there is a concern as to how county clerks, and other affected offices, will implement and execute the direction of the legislation. Is it reasonable to expect county clerks to individually redact the names or addresses on recorded documents, or will they have the capacity to handle all of the requests that come in? And even if they are successful in redacting critical pieces of information from recorded documents, will that cause issues when title companies are performing title searches if a judge or police officer wants to sell or refinance their home? We can also take a cue from other states and municipalities that have implemented similar measures in the past. In California, some municipalities have completely taken records offline rather than redact selected data. Philadelphia’s county register has disabled the “search by name” functionality from their online records, significantly hamstringing the ability to perform title searches there.
While it is hard to predict how the implementation of Daniel’s Law will play out in New Jersey, it is reasonable to surmise that the county clerks may not have enough resources to treat each document on a case-by-case basis. It may be more reasonable for county officials to take more drastic blanket measures to comply with the law, severely hampering the ability for real estate professionals to gather the necessary information to perform searches, prepare litigation, and to facilitate transactions.
NJ Law on Notarial Acts
During the pandemic, Governor Murphy signed an executive order temporarily allowing electronic notarial acts, essentially allowing for notaries public to use telecommunication technology to witness the signing of documents. In some sense, this temporary measure was not only a response to the limitations caused by social distancing considerations, but was also a trial run for a permanent modernization of how notarization is conducted. In July of 2021, Governor Murphy signed Assembly Bill No. 4250, setting a path forward to commissioning notaries to conduct notarial acts remotely and electronically.
Again, on its face, this legislation represents a positive step towards embracing technology to align common practice with common sense. With the ubiquity of video conferencing tools, the low cost of data storage, and the rising comfort level with computers, tablets, and smartphones, it makes sense that documents should be able to be notarized on the cloud. It is important to consider, however, that opening the doors to remote notarization may also open the door for other trends as well.
Over the years, national lenders have been pushing their subsidiary title agencies that have no local presence. Now that closings can be conducted remotely, with little need for a local notary, will NJ-based title agencies still be called upon for refinance closings, or will all closings be handled by a call center title provider based out of whatever state has the lowest minimum wage? Is it conceivable that notarization gets outsourced out of the United States entirely?
Similar to Daniel’s Law, the NJ Law on Notarial Acts still has a ways to go in its implementation. It is important, though, to consider the bill through a critical lens, and to understand that the legislators who pass these laws may not have deep experience in the actual practice of real estate.
Oftentimes, even actions borne from the best intentions can have unintended consequences. From our standpoint, we are closely monitoring the implementation and enactment of these two pieces of legislation to see what kind of positive or negative impacts they will have on real estate closings. Either way, if history is any indication, the real estate industry will be prepared, adaptive, and creative in their response.