Many tasks that were relatively easy to accomplish became nearly impossible during the height of the COVID-19 pandemic, and while much of everyday life has returned to “normal,” some modifications to accommodate social distancing protocols have become more permanent. One such accommodation is the growing acceptance of electronically executed documents and, for those that require notarization, electronic remote notarization.
Prior to 2020, only 21 states had adopted and enacted statutes authorizing electronic remote online notarization (RON). As McGuireWoods reported in an April 6, 2020, alert, in direct response to COVID-19, an additional 19 states implemented executive orders or legislation to permit RON. Additionally, as some documents are not eligible for electronic execution and because of the stringent technological requirements to implement RON, a significant number of states enacted temporary laws allowing the video notarization of documents (see McGuireWoods’ April 15, 2020, alert). Most temporary statutes authorizing video notarization have lapsed, so the convenience of having documents notarized without having to meet with a notary in person is no longer available.
North Carolina was one of the many states that enacted a temporary law allowing the remote (or video) notarization and witnessing of documents, referred to as emergency video notarization (EVN). North Carolina’s EVN expired December 31, 2021. In response to continued calls to extend the use of EVN, on July 8, 2022, North Carolina passed House Bill 776, which Gov. Roy Cooper signed on the same date, re-enacting EVN. Additionally, the new law adopts RON, making North Carolina one of 41 states to do so. While notarization of documents may not be a task regularly considered important or challenging to accomplish, a significant number of legal documents require notarization, so the adoption of RON and the re-enactment of EVN are a significant advancement and reflect the changing manner in which business is conducted.
RON Versus EVN
At the outset, it is important to understand the differences between the electronic execution and notarization of documents, versus the remote or video notarization of wet-signature executed documents. EVN is the notarization of the live (or wet ink) signature to a document, and RON is the notarization of an electronically executed document. EVN involves the use of video, where the notary verifies the identity of the signatory executing the document and then, following statutory procedures, receives the executed document from the signatory and completes the notary attestation and applies the notarial seal. North Carolina’s EVN also allows the same procedure for witnessing documents, including wills, healthcare powers of attorney and similar documents. In using EVN, the signatory, notary and any witnesses all must be present in the state of North Carolina.
Traditionally, a critical part of the notarization procedure is that the principal must appear in person before a notary public who can verify the identity of the person executing the document and witness the signatory executing the document in the presence of the notary. As the electronic execution of documents has become more prevalent and authorized under federal law, states have begun to adopt statutes for the notarization of electronically executed documents (RON). RON also does not require the signatory and notary to be in each other’s presence, as the electronic execution of a document is conducted through computer transmission. Using this method for the execution and notarization of the document involves the use of technology that prevents the manipulation or altering of the document, and allows identity verification.
Limitations on Use of RON
RON is available only for documents that are eligible to be executed electronically. For example, contracts, deeds and auto title transfers may be executed electronically, and therefore are eligible to be notarized using RON. However, in most states, including in North Carolina, the majority of estate planning documents — such as wills, codicils to wills, revocable and irrevocable trusts — cannot be executed electronically, and therefore cannot be executed using RON. Some states — including Arizona, Colorado, Florida, Illinois, Indiana, Nevada, North Dakota and Utah, as well as the District of Columbia — have enacted statutes authorizing the electronic execution of wills, but North Carolina has yet to enact this legislation.
The requirements of RON are more stringent than those for EVN. For example, RON requires that the communication technology be capable of recording using the communication technology’s recording and storage services and of geolocating the remotely located signatory to corroborate the signatory’s location. Additionally, identity verification is more difficult and requires producing a government-issued identification as well as taking an online questionnaire. Therefore, before RON can be utilized in North Carolina, the North Carolina secretary of state must propose and adopt rules and procedures for the use of RON, including providing for approved technologies for electronic execution and identity verification, which rules must be announced prior to June 30, 2023.
McGuireWoods will continue monitoring changes or updates to the EVN and RON laws in North Carolina.