Remote Notarization and Real Estate Transactions
As of March 19, 2020, Governor Cuomo issued the seventh modification of an executive order authorizing the temporary suspension or modification of various laws due to the Covid-19 epidemic. Executive Order 202.7 permits notarial acts to be conducted through electronic means and sets forth the acceptable process for remote notarization.
In summary, live audio-video technology must be used to allow the notary to witness the execution of the document to be notarized. If the executing party is not personally known to the Notary, they must present valid photo identification during the live video conference (transmitting it electronically to the notary is not sufficient). The video conference must allow for live interaction between the executing party and the Notary. The executing party must affirmatively represent that they are physically located within New York State. The executing party must transmit the executed document (via electronic means) to the Notary on the same day it is executed. The Notary is then permitted to notarize the electronic document and transmit the same back to the executing party. The Notary is also permitted to re-notarize the original document as of the date the original document was executed, provided the Notary receives the original document together with the electronically notarized document within thirty days after the date of the original execution.
This modification of the notarial laws provides a useful tool to allow business and other essential documents to be executed during this period of social distancing and self-quarantines. For real estate transactions the effect of this modification may be muted.
Although several jurisdictions in New York State already either permits or mandates electronic recording virtually all such jurisdictions require that the recording party possess actual originals of the documents being recorded. Other jurisdictions do not permit electronic recording and require in-person delivery of originals. These requirements could effectively mute the efficacy of the remote notary provisions promulgated by the Governor. (This is, of course, assuming that the recording office remains functional during the current crisis.)
It is also unclear how title companies and other third parties will treat remotely notarized documents. Although the temporary modification of the State notarization rules should suffice for third parties, the temporary nature of the executive order creates questions as to how these documents will be treated in the future. The language of the executive order, itself, seems to recognize the possibility that various parties will not recognize the notarization of a facsimile copy, even if done in accordance with the strictures of the executive order, by setting forth a mechanism to allow for the re-notarization of the original document afterwards.
While the new remote notarization rules are a good starting point to facilitate continued business transactions during an extended period of social distancing and self-quarantines, more is needed to make these provisions truly effective in the field of real estate transactions. These actions should include a clarification regarding how facsimile notarized documents will be treated after the cessation of the current crisis (making remote notarizations permanent, rather than a temporary crisis provision should be considered), as well as uniformity in electronic recording, and electronic recording rules that clearly permit the submission of these documents for recording throughout New York State.
DISCLAIMER: This summary is not legal advice and does not create any attorney-client relationship. This summary does not provide a definitive legal opinion for any factual situation. Before the firm can provide legal advice or opinion to any person or entity, the specific facts at issue must be reviewed by the firm. Before an attorney-client relationship is formed, the firm must have a signed engagement letter with a client setting forth the Firm’s scope and terms of representation. The information contained herein is based upon the law at the time of publication.