Before 2011, when Virginia became the first state to sign Remote Online Notarization (RON) into law, the practice of notarizing documents in the US had traditionally been conducted face-to-face. State governments provided authority to a notary or lawyer to ensure that the signer/client had a valid personal identity as well as to approve the validity of the documents.
The long-standing pen and paper method of notarial work proved to be cumbersome and susceptible to mistakes. Documents and Identification Cards could be faked. Signatures were forged. People could lie about their identities. Manual storage of the notarized documents could lead to theft or destruction (man-made or accidental). And the only record of the notarization having taken place were the documents and the names and signatures that these contained – all of which could be disputed.
Virginia became a pioneering state when, in 2011, it passed a law allowing the practice of RON. Virginia’s law was important in outlining several of RON procedures, including verification of the signer and standards in making sure that the notary seal is protected from tampering.
In recent years, with the increasing acceptance of online transactions when it came to various business deals and even government services, more and more states embraced the idea of RON. By May 2019, the number of states that passed it into law reached 21, with most of them adopting the provisions of the original Virginia law.
By July 2021, with the onslaught of the COVID-19 pandemic causing more and more transactions to be conducted online, a total of 35 states had some sort of permanent RON laws in existence.
With the post-pandemic work and business environment looking to include more and more remote transactions, there will be an increase in the number of documents being notarized online as well, and all for practical reasons. Read on below as we discuss the features of RON that allows it to overcome the historical weaknesses of traditional ink and paper notarization.
The speed and interoperability by which RON enables transactions to occur allows clients and vendors/service providers to engage in business deals much more smoothly. It allows for a situation where notaries can truly perform both business and good service.
RON can be used in multiple forms of transactions, including applying for loans, getting a mortgage, processing land titles, conducting retirement withdrawals, appointing a health care proxy, and even swearing-in of witnesses in court cases.
Last year’s industry reports reveals the increased acceptance of RON by clients, notaries, and cybersecurity companies:
“Dealmaking in the virtual notary services space rose despite the pandemic. In July, DocuSign acquired Austin-based startup Liveoak Technologies for $38 million in an all-stock transaction. Digital notary platform Notarize also closed on a $35 million Series C round of funding in March, raising a total of $82 million with investments from real-estate focused venture capital firm Camber Creek, Boston-based Polaris Partners, and other existing strategic investors.
Clear Audit Trails
Traditional ink-and-paper notarized documents are essentially stand-alone records. They are assumed to be valid because they have been sealed by a notary who is an agent of the law. But because there are no tamper-proof materials that can provide support to these documents, these can be disputed by the people whose names appear as signers.
RON involves a cyber storage of e-documents that records significant information as to who gained access to a document, to whom it was shared, who electronically signed it, who electronically notarized it, and where were the locations of each party when the online notarization happened. These digital records cannot be modified so the signers cannot deny that they have, in fact, entered into the transaction. Additionally, the video recording of the notarization serves as a strong support to the e-documents.
The vendor or service provider also gains protection in RON. Camelia Martin, former managing director at Falcon Capital Advisors explained that “if the transaction is ever challenged, the lender has the ability to access an audit trail and an audio-video recording of the online notarization session.”
Retention of Document Integrity
Keeping integrity in the content of documents is important for a notary to gain protection from lawsuits or false accusations.
In the real estate industry, property sellers, agents and buyers have been able to partner with notaries in using RON to verify, securely exchange, and store pertinent documents related to a property sale.
Through the use of digital encryption, RON is able to provide soft copies of legal documents with tamper-evident digital seals/signatures. If the original content of the document is changed, the seal is revoked and the potentially malicious intent is revealed.
More Accurate Verification of Signer’s Identity
With the use of Dynamic Knowledge-Based Authentication (KBA) in RON to more strictly and accurately validate identities, the notary can expect a good result. Dynamic KBA involves private information that cannot be easily known. These include a person’s credit history or previous records of transactions. If the signer provides satisfactory answers to identity challenge questions, the notary can seal the document with confidence.
Additionally, when it comes to RON, a notary is less likely to be pressured into providing their seal if they are in doubt. Andrew MacDougall, digital marketing manager of Boston-based Notarize says that for notarizations that take place in the signers’ homes, around “1 in 4 notaries have felt intimidated into applying their seal.” Because remote notarization makes use of distant communication, the notary can be more objective in analyzing the documents and the identities of the signers and refuse to sign if they detect something fishy.
For its capacity to combat identity thieves and individuals committing fraud, online notarization has been strongly commended by societal sectors such as health care organizations and law enforcement agencies.
Safe and More Convenient
With the COVID-19 pandemic still to be dealt with, RON presents the ideal method when it comes to a safe way for clients and lawyers to transact in the legal verification of documents and identities. In the loaning business, Brian Madocks, CEO of eOriginal, a Maryland-based digital loan processor shared that “borrowers and loan officers want and need remote capability to maintain social distancing and continue to transact business.”
The functionality of RON shows strong evidence where states implement lockdowns or when parties are located far from each other. Even more so for people who are in quarantine and COVID-positive individuals who are restricted from leaving their current location.
At present when both domestic and cross-country travel pose challenges, RON overcomes the impracticality and health risks with face-to-face notarization. This modern method provides a solution for Americans working or residing in other countries, for those serving in the military overseas, and for people who are in some form of time constraint.
The widespread acceptance of Remote Online Notarization by state governments, lawyers, businesses, and clients indicate that modern society is increasingly recognizing the benefits of digital technology when it comes to improving the quality of modern life.
The success with RON shows that convenience and security does not have to be diametrically opposed. Compared to traditional notarization, transactions are conducted faster and important documents are more securely stored in RON.
If you are a notary and you want to know more information about the requirements for RON, check out our article here.