Remote Closings and Notarization

Contents

1. Electronic signatures
2. Remote online notarization
3. The federal bill
4. Recording offices
5. The apostille
6. The honest limit

International buyers from Korea, China and the Middle East work with Mike Kobeissi’s firm, and for a buyer living abroad much of a closing can now take place on a screen. Consider a composite case. A buyer in another country has agreed to purchase a California house. Over the following weeks the purchase documents arrive as electronic files, which the buyer reviews and signs at a laptop with an electronic signature. For the pages that need a notary, the buyer appears before a commissioned notary through a live audio and video session, passport in hand, rather than in the same room. One more document, notarized in the United States but needed back home, goes to a secretary of state for an apostille, the certificate that lets officials abroad accept the notary’s seal. Each of those steps rests on a different system, and each has its own limits.

Electronic signatures

The first layer is the electronic signature. The National Association of Realtors describes signature and authorization systems that let buyers, sellers, lenders, title agents and other parties remotely review, revise and approve documents on a computer or mobile device, so that much of a transaction moves without a sheet of paper and the path to closing avoids familiar bottlenecks.¹ Documents that must be notarized need one more step.

Remote online notarization

Remote online notarization, known as RON, is the process in which a signer uses an electronic signature and appears before the notary through online audio and video technology, so that signer and notary need not meet in person.¹ During the COVID pandemic many states issued temporary orders allowing it, and a majority have since enacted statutes that permanently allow every certified notary in the state to use it, provided adequate safety and cybersecurity measures are met. The association adopted a policy supporting such measures in November 2018.¹ Use grew fast once distancing began: National Mortgage News reported that a title industry vendor survey found remote notarization use up 547 percent in 2020 over 2019, and the trade group’s chief executive pointed to overseas military service and time constraints as other reasons in person signing can be impractical.²

Figure

Notarization in the room and on the screen

	Traditional	Remote online
Signature	Signed on paper	An electronic signature on an electronic document
How the signer appears	Physically before the notary	Before the notary over online audio and video
Where the parties are	Together in one place	Anywhere, at any time
Standing	Long established	Permanent in a majority of states, where adequate safety and cybersecurity measures are met

The federal bill

Recognition of a notarization across state lines has been the subject of a federal bill. CNBC reported in March 2020 that a bipartisan pair of senators had introduced the Securing and Enabling Commerce Using Remote and Electronic Notarization Act, known as the SECURE Notarization Act.³ Reintroduced in 2021 with a House companion and 31 cosponsors from both parties, the bill as written would require every state to recognize notarizations performed by a notarial officer of any other state.² In February 2023, the association reported, the House passed it, with the association calling the reliability of notarized public records a cornerstone of mortgaging, purchasing and selling real property; the bill’s fate in the Senate was described as unclear.⁴

Recording offices

A signed and notarized deed still has to be recorded by a county. The same 2020 CNBC report counted nearly 2,100 counties that provided some electronic access to their property records, which left about a third of the country’s jurisdictions without the ability to accept digital documents.³ Where a recording office cannot take an electronic file, a fully remote closing meets a paper step at the end.

The apostille

Documents that cross borders need a further form of proof. The Hague Conference, known as HCCH, administers the 1961 Apostille Convention, which replaced the older, often long and costly process of legalisation with a single certificate issued by a competent authority where the document originates. The convention has 130 contracting parties, several million apostilles are issued each year, and an electronic apostille program running since 2006 issues certificates in digital form that must be accepted like paper ones.⁵ In the United States the issuing authority depends on the document. USAGov explains that state documents receive apostilles from that state’s secretary of state and federal documents from the Department of State, while countries outside the convention require an authentication certificate instead.⁸ The National Association of Secretaries of State directs requesters to the state that issued the document, and lists the Department of State’s Office of Authentications for federal papers.⁹

Figure

Readying a US document for use abroad

1. 01
   Name the countryThe country where the document will be used decides which certificate is needed.
2. 02
   Convention memberIf that country belongs to the 1961 Hague Convention, the document needs an apostille.
3. 03
   Not a memberOtherwise it needs an authentication certificate instead.
4. 04
   State documentsDocuments issued by a state get their apostille from that state's secretary of state.
5. 05
   Federal documentsFederal documents get theirs from the US Department of State.

What the certificate covers is narrow. The California Secretary of State says an apostille authenticates the signature of the public official on the document, the capacity in which that official acted and, where appropriate, the seal or stamp it bears, such as a notary public’s seal; the office issues one form of apostille regardless of the destination country, and the rest of a document may be in another language so long as the notarization is in English.⁶ The Texas Secretary of State will apostille documents notarized online by two way audio and video when they arrive with the notary’s ledger and a correct notarial certificate.⁷

The honest limit

Remote tools change where documents are signed; they do not change what the documents mean. The California office states plainly that an apostille does not validate the contents of the document it accompanies.⁶ The Texas office warns that some countries do not accept online notarized documents even when properly authenticated, and advises checking with the receiving agency first.⁷ County recording, interstate recognition and foreign acceptance each remain uneven, so a closing planned as fully remote can still require an overnight courier or a trip. The money in such a closing usually moves by wire, a step covered under wire fraud in home purchases, and the wider pattern of purchases from abroad under international buyers in US housing. How any particular signing should be arranged is a question for the buyer’s escrow holder and own advisors.