Almost every area of finance and business has dramatically changed as a result of the digital revolution. Notarization has not been among them. If a document needed a notarized signature, it required an in-person meeting with a notary public present where the notary watches the person sign the document and then stamps the document with a rubber stamp. This is not much different than the process followed half a century ago. But thanks to the adoption of the Revised Uniform Law on Notarial Acts (“Revised Act”) adopted in Minnesota during the 2018 Legislative session, this process will finally enter the digital age in earnest. For the first time in Minnesota, the Revised Act will allow for remote online notarization beginning January 1, 2019.
For notarizations performed in-person, the Revised Act makes only minor changes. Notaries performing notarial acts in person will still identify the person signing by a driver’s license or other form of identification, witness the signature, and sign, date, and stamp the document as in the past. However, notaries performing a remote notarization—performing a notarial act when the notary and the person signing are not in the same physical location—must follow special rules set out in the Revised Act. This article will detail the process of performing remote online notarization, which is set forth at Minnesota Statutes §§ 358.645–358.646.
In order to perform remote notarizations, a notary public must be properly qualified. Naturally, the person must actually be appointed and commissioned as a notary public. The notary must then apply to the Minnesota Secretary of State’s office for remote online notarization registration and certify that the notary intends to use “communication technology” to perform notarial acts. The registration to perform remote notarization will remain in place so long as the notary commission remains valid, unless terminated sooner. A registration to perform remote online notarization may be revoked or terminated if the notary fails to comply with the provisions governing remote notarization.
In some respects, the procedure for performing a remote online notarization follows the traditional process. The notary must verify the identity of the individual signing the document, witness the signature, and then apply their notary stamp to the document (electronically). The Revised Act contemplates that remote online notarization will deal primarily with electronic signatures, rather than wet ink signatures. This facilitates the ability of the signer and the notary to both work from the same document even though located in different places.
As with traditional notarization, the location of the notary governs. A notary physically present in Minnesota may notarize documents remotely even when the signer is located in another state (or another county in limited circumstances). The reverse is not true; a Minnesota notary may not notarize documents pursuant to their Minnesota commission if the notary is located in another state, even if the remote signer is located in Minnesota.
Use of Communication Technology
The first requirement for remote online notarization is that the notary must still witness the “signature;” thus, remote online notarization requires that the notary use communication technology in which the notary and the signer are able to see and hear each other. This would be typically accomplished with a webcam or similar device. During the entire process, both parties should be able to see and hear each other in real time. The notary must take reasonable steps to ensure this connection is secure.
As noted above, one of the biggest differences in remote online notarization is in the identity verification procedures—the steps the notary should take to ensure the person before them signing the document is who they say they are. Under the Revised Act, a notary who has “personal knowledge of the person creating the electronic signature” need not take additional steps for verification. In other words, if the signer is a friend, colleague, family member, or other person whom the notary already knows, additional verification is unnecessary.
However, when the notary does not have “personal knowledge” of the signer, then the notary must complete a two-step identify verification procedure. First, the notary must review, through webcam or other device, a driver’s license, passport, or other government-issued identification document; the notary should of course compare the picture and description on the ID to ensure it appears to match the individual on the other end of the video feed who will be signing. The driver’s license or other document relied on must also be “validated”; in other words, the notary needs to take steps to ensure the document itself is authentic. The Revised Act requires that the notary use “one or more automated software or hardware processes that scan the credential, including its format features, data, bar codes, or other security elements” to ensure the document is valid and matches the signer’s claimed identity. Third-party software may be available to use the webcam feed as a scanning device to conduct this verification.
After the identification document is verified, the notary must use “knowledge-based authentication” to verify the signer’s identity. This involves asking the signer a series of questions that the signer must answer correctly to prove their identity. Specifically, the notary must ask “five or more questions with a minimum of five possible answer choices per question.” The questions should be drawn from information contained in a credit report or similar third-party report. Thus, questions about addresses associated with the signer, banks with whom the signer may have a loan, or similar inquiries would be likely questions to ask. The signer must answer all questions within a two minute period and must answer at least 80% of the questions correctly (4/5). If the signer does not answer enough questions correctly, the notary may offer a second attempt; during this second attempt, no more than three of the questions from the first attempt may be asked. Assuming that the identification document checks out, and the signer answers the questions correctly, the notary can move forward with the execution of documents.
Electronic Signature and Electronic Notarization
In almost all remote notarization situations, the signer will then “sign” the document electronically. This means to attach or associate an electronic symbol, sound, or process to the document in manner that evidences the signing of a record. In many cases there is special software that allows this, or the signer may simply add a typed “/s/ John Doe” in a signature block, or even check a box.
After the electronic signature is provided, the notary may then complete their “remote online notarial certificate” which is the acknowledgement or verification that contains the usual information associated with a notarial certificate. The certificate must include the notary’s electronic signature, electronic seal, title, commission number, and commission expiration date and any other information otherwise required. The certificate must indicate the time and place of the notarization—this should be the location of the notary, not necessarily the signer. The certificate must also indicate that the person signing appeared before the notary remotely and online. The notary must use software or other process to attach the electronic signature and electronic seal to the certificate in a manner that “is capable of independent verification and renders any subsequent change or modification to the electronic document evident.” In other words, some software must be used to ensure the document cannot be altered after the fact.
The notary’s electronic seal that must be included is similar to the rubber stamp typically used in traditional notarizations. The notary must keep the electronic seal secure to prevent unauthorized access and use. This may be accomplished by using third-party software and password protections.
Electronic Journal and the Record of the Notarization
Although notaries are encouraged to keep a journal of traditional notarial acts, the law does not require it. However, for remote online notarizations, the notary must keep a secure electronic journal of all remote online notarization acts performed by the notary. This journal must include the following information: (1) the date and time of the notarization; (2) the type of notarial act (e.g., an acknowledgement of a record or attestation of a signature); (3) the type, title, or description of the electronic document or proceeding; (4) the printed name and address of each signer; (5) evidence of the identity of the signer; and (6) the fee (up to a statutory maximum of $25) charged for the notarization.
In addition to the electronic journal, the notary must “create an audio and video copy of the performance of the notarial act.” Thus, the notary’s actions in filling out the notarial certificate and affixing their electronic seal must be recorded. It may be good practice to keep an audio and video record of the entire exchange, including the identity verification procedures.
Both the journal and recordings must be kept for a period of ten years from the date of the transaction. The notary’s employer or a third party may serve as a repository for these records, provided that either is able to ensure the integrity and security of the data, and maintain a backup of the data.
A notary performing online notarizations has an affirmative duty to make a report to law enforcement and the commissioner of commerce if their electronic seal or electronic journal is stolen or vandalized. As a practical matter, this means that if the notary has reason to believe their account has been hacked or compromised, they should report it immediately.
There is no doubt that remote online notarization is a complicated process when compared to traditional notarization, but it may open up opportunities or ease other burdens when dealing with individuals located out of state or otherwise. However, as the use becomes more widespread, it is likely that third-party vendors will create software and processes that will facilitate and streamline the process. It appears that with the adoption of the Revised Act, Minnesota is poised to bring the archaic process of notarization into the digital age.
This information is general in nature and should not be construed for tax or legal advice.