A Short Course on Online Notarization
Notary publics are the Rodney Dangerfields of the legal industry. They get no respect, yet their contributions to the legal community are priceless, particularly to real estate attorneys and title companies seeking to record documents in the Real Property Records of the 254 Counties in the State of Texas. Given the escalating technological advances associated with the practice of law, it is not surprising that, effective as of August 19, 2018, notary publics in Texas now have the ability to legally provide their notarization services online. This article will provide an overview of legal components of online notarization in Texas.
1. Legal Authority
Notary publics in Texas derive their legal authority from three (3) sources: (1) Texas Government Code, Chapter 406, Subchapter C, (2) Texas Civil Practice and Remedies Code, Chapter 121, and (3) Texas Administrative Code, title 1, Chapter 87. Although a detailed discussion of the qualifications required to be an online notary public in Texas is beyond the scope of this article, suffice it to say that a comprehensive review and understanding of each of the foregoing three (3) legal authorities is essential to assess the legitimacy of a purported online notarization.
The short course on online notarization requires one’s appreciation of, and adherence to, the following principals. First, an “online notary public” must apply to the Texas Secretary of State and be appointed and commissioned by the Secretary of State as an “online notary public.” Tex. Gov’t. Code §§ 406.101(10), 406.105. Thus, current notary publics do not automatically become “online notary publics.” As a result of this new appointment and commissioning requirement, it is imperative that Texas attorneys verify the validity of any notary public’s claim to be an “online notary public.”
Second, the Texas Secretary of State was charged by the Texas Legislature in Section 406.104 of the Texas Government Code to develop and maintain “standards for online notarization.” These “standards” include standards for an online notary public to perform credential analysis and identity proofing. Effective as of August 19, 2018, the Texas Secretary of State promulgated the required “standards,” which are published in Texas Administrative Code, Title 1, Chapter 87, Section 87.71. Compliance with these promulgated standards is essential.
Third, as stipulated in Section 121.006 of the Texas Civil Practice and Remedies Code, the word “acknowledged” as used in Texas approved acknowledgment forms means the individual executing the document “personally appeared” before the notary public. Satisfaction of this “personally appeared” requirement is the crux of the validity of online notarization. In order to comply with the “personally appeared” element of “acknowledged,” the Texas Legislature revised Section 121.006(c) of the Texas Civil Practice and Remedies Code to stipulate that a person may personally appear before the person taking the acknowledgment by “appearing by an interactive two-way audio and video communication that meets the online notarization requirements under Subchapter C, Chapter 406, Government Code, and rules adopted under that subchapter.” Thus, current technologies such as audio-video conferencing in offices and FaceTime on cell phones allow an online notary public to validly acknowledge the appearance and signature of an individual located off-site. Of course, as noted in the Secretary of State’s promulgated standards, the online notary public is charged with responsibility for implementing means of authentication of the identity of the parties, insuring the document presented for online notarization is the same document electronically signed by the principal, and securely creating and storing an electronic recording of the audio-video conference. As with all technological frontiers, there are many hurdles to overcome to insure the legal viability of an acknowledgment performed via online notarization.
2. Online Notarization Forms
The first step in implementing the arrival of online notarization is to promulgate new acknowledgments which accommodate online notarization. Fortunately, the legal draftsmen in Texas quickly stepped-up with universal acknowledgment forms for use in Texas. The following online notarization forms can be adapted to cover acknowledgments by attorneys-in-fact, executors, trustees, etc. In order to provide maximum flexibility for the online notary public and the principal, the new acknowledgments contain optional text to cover both the principal signing in the presence of the online notary public as well as the principal signing remotely via an interactive two-way audio and video communication. The online notary public, as well as the attorneys present at the execution of the document, must insure the appropriate box is checked to preclude future disputes regarding the validity of the online notarization.
To be clear, we are in the embryonic age of online notarization. There are many unasked questions, much less answers, with respect to the implementation of online notarization. However, we do know the first step rests with the online notary publics in Texas. They must apply to the Texas Secretary of State to be appointed and commissioned as “online notary publics.” Once this initial implementation hurdle is overcome, the waterfall of new issues, concerns and challenges inevitably will follow. For now, let’s enjoy the fact that a late night closing may not come to an abrupt halt due to the lack of an available online notary public to personally witness the execution of the closing documents. Like 24-hour pharmacies, it will not be long before the legal community is besieged with advertisements for 24-hour online notarization services.
Click here for sample online acknowledgments. These online acknowledgments are sample forms only. Obtain legal advice before using these sample forms.
Patrick T. Sharkey has over 40 years of experience as a commercial real estate attorney representing sophisticated clients in a diverse and dynamic blend of real estate transactions. Client engagements include the representation of landlords and tenants in office, industrial, retail, healthcare, and submerged land (Houston Ship Channel) leasing. Since 2003, Pat has been recognized among Thomson Reuters “Texas Super Lawyers” list for business real estate.