Everything You Need to Know About Remote Closings
With the rise of the digital age and the pandemic pushing remote opportunities farther than ever, real estate did not fall behind. Emerging digital platforms and new laws provide more flexibility than ever to potential buyers and investors in real estate. Remote closings make it so that the parties involved in a real estate transaction do not have to be physically present for the closing on their contract. Remote closings allowed for real estate transactions to continue during the COVID 19 pandemic. But despite popular belief, remote closings were allowable even before the pandemic began although not as prevalent.
What Does A ‘Remote Closing’ Mean?
To understand why remote closings are possible, one must understand the processes behind them. Once a real estate purchase reaches the closing process, there are many standard and procedural documents that must be signed and notarized. All closings require many pages of paperwork filings and signatures from all parties in a transaction. Traditionally, parties would need to sign documents and appear at a physical location at a predetermined time to have signatures verified and notarized. Many states have now adopted laws that allow for virtual signature verifications. Remote Online Notarizations (also known as RON) are the backbone of remote closings. Without Remote Online Notarizations (RON), it would not be possible to conduct a remote closing. Florida became the twenty-first state to adopt remote online notarizations. On January of 1, 2020, Governor Ron DeSantis signed House Bill 409 into law allowing for Florida to accept closings using the remote online notarization system. This came at a convenient time for Florida’s real estate market with the looming pandemic soon to be underway. This new process streamlined the closing of transactions within the State of Florida.
Who Can Benefit From Remote Closings?
Anyone can benefit from remote closings. They are especially beneficial to parties participating in transactions that are multi-state or even international. Parties are no longer restrained by differing time zones or conflicting schedules. Traveling for document notarizations can be completely eliminated should both parties chose this option. Remote closings are truly beneficial for anyone and everyone completing a real estate transaction. It makes the closing process so convenient that purchasers and buyers can remain in the comfort of their own homes to close on a property. Documents can be signed from a personal computer or mobile device such as phone or tablet.
Alternatives to RON:. RIN vs. IPEN
Some states do not accept remote online notarizations but provide other options for online notarizations. Remote-Ink Signed Notarizations, (known as RIN), are notarizations with wet-ink signatures. Parties are able to use a video conference technology such as zoom to appear before a notary and sign documents virtually. The documents are then sent to the title company for processing. In-Person E-Notarization (also known as IPEN) are notarizations where closing documents are signed electronically but not remotely. This method merely eliminates the paper involved in signing. While this method is not technically ‘remote’ it cuts waste on paper and allows an electronic signature as an alternative to a ‘wet ink signature’.
These notarization types are not as publicly accepted as the Remote Online Notarizations because of the lack of security with the programs. The Remote Online Notarization process also has more defined guidelines and laws set in place for ease of use and security. However, the laws of some states have not yet caught up with the remote online notarizations and have instead passed emergency orders to grant flexibility.
Laws and Capabilities
Currently, only 25 states have adopted laws for RON. Other states have passed emergency orders authorizing virtual notarizations due to COVID-19. As of February 2023, Congress is seeking to pass a law titled the “Securing and Enabling Commerce Using Remote and Electronic (SECURE) Notarization Act of 2020”, or less formally known as the SECURE Notarization Act. This bill would allow notary publics to remotely notarize electronic records and perform notarizations through its entirety completely online. The bill also provides technical requirements and would ensure that all U.S. courts and states recognize and authorize remote notarizations for document processing. It has since passed the House vote and is on its way for a Senate vote. If the SECURE Notarization Act passes into law, states would have no need to extend emergency orders on online notarizations. Another advantage is that any video conferencing tools created under the emergency orders would be replaced with updated online programs offering better safeguard environments for these notarizations. This Act, however, does not supersede state laws or infringe on anyone’s choice to hold an in-person closing. Should parties choose to undergo a traditional closing in person, it is still permitted.
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It should be noted that I am not your lawyer (unless you have presently retained my services through a retainer agreement). This post is not intended as legal advice, it is purely educational and informational, and no attorney-client relationship shall result after reading it. Please consult your own attorney for legal advice. If you do not have one and would like to retain my legal services, please contact me using the contact information listed above.
All information and references made to laws, rules, regulations, and advisory opinions were accurate based on the law as it existed at this time, but laws are constantly evolving. Please contact me to be sure that the law which will govern your business is current. Thank you.
