By now you have probably heard of Remote Online Notarizations, commonly referred to as “RON.” RON is being hailed as a tool that will revolutionize the closing process, and some day it will. But for now, the process of conducting closings using RON is going through some growing pains as we all race to understand it a bit better and under what situations it can be effectively used (and equally important, when it cannot be used).
Quite simply, RON allows for the electronic execution of documents by a party that require either a witness or a notary to be performed outside of the physical presence of that witness or notary. In other words, a buyer or seller can execute documents electronically in the comfort of their own home, while the witness and/or notary can be located in an entirely different location. In the COVID-19 era, this sounds pretty neat (and BPE will be rolling out a true RON program next week…beware of imposters). But there are some things that will be helpful to understand to make sure there is an appropriate level of understanding about how RON works and who will accept RON.
First and foremost, the Buyer or Seller must have the technical capabilities to do a RON closing from their computer (note that tablets will not work). This will require strong internet access, a webcam, a microphone, a smart phone, and either Chrome or Firefox (depending on the program that the closing agent is using). This may seem simple, but you would be surprised how many people lack the technical capabilities to do a RON closing or do not understand how to use their devices in a way that will allow them to satisfy the technical requirements for a RON closing.
Assuming you get past that threshold, then RON can be used for any cash buyer, any seller, and any financed buyer whose lender will accept RON. This is where many are getting tripped up, because although most lenders will tell you that they accept RON, they really do not. And for those who do, many (if not most) still require some of their documents to be executed the old fashioned way and not electronically (known affectionately as a wet signature). So for buyers who are using a lender, it will be imperative that they ask their lender if the lender will accept RON for all of the lender’s documents (not just most of them).
For those of you who are interested, if your signing can be done electronically using RON, this is how RON works in practice:
1. The signer will be patched into a 2 way video call with the notary which will allow the signer to e-sign documents on their computer (no tablets).
2. The signer will be asked to access an electronic document signing program used by the RON (there are a few that are currently approved by the State of Florida) and the signer will be asked to follow the instructions for that program to log in and access the closing documents to be electronically signed (warning the process can be a little involved).
3. The signer will need to confirm that they are a US Citizen with a valid social security number. Foreign nationals do not qualify.
4. There will be an identity confirmation process. To confirm one’s identity, the system requires that a signer take a 5 question quiz based on information pulled from proprietary sources (credit report).
5. The signer will still need an acceptable form of ID, which is confirmed by taking a picture of the front and back of the ID with the party’s smartphone. The signer will then need to upload it to the system. The notary will do a normal visual check as well.
6. The signer will confirm verbally or in writing that the signer desires the notarial act be performed by a Florida notary under the laws of Florida.
7. There will then be a general description of documents to be signed and an opportunity to discuss them as you would in a traditional closing (assuming your RON notary is your actual closing agent, and not an outsourced RON notary, as some closing agents without in-house capacity are using).
8. The signer will then electronically execute the documents in front of the notary (and witness, as applicable).
9. Once the documents are signed, there will then be a recitation by the online notary public of information sufficient to identify the notarial act and the signer will need to verbally declare that their signature on the record is knowingly and voluntarily made.
10. If a witness is required and the witness is in the physical presence of the signer, then the witness will simply need to confirm their identity by stating their name and current address.
11. If the witness is not with the signer, then their identity must be verified in the same manner as the signing party (see 4 above), must hear the signing party make a statement that the signer has signed the electronic record, and verbally confirm that the witness is a resident of the United States and located within the United States.
12. Once fully executed, the documents will be delivered electronically to the closing agent and the process is then complete.
Don’t shoot the messenger here. Many, if not most of these requirements are legal requirements in order to do a RON closing, and we are not going to lie to you, the systems for doing e-closings in this fashion are a little clunky right now. As RON closings become more prevalent (and they will), the systems and processes will improve and we will all get much more used to doing closings remotely. In fact, we are getting an overwhelming number of requests to do remote closings already, so it will be important for everyone to understand how they truly work and when they can be done.
As always, should you have any questions about RON closings, please reach out to your real estate attorney.
Berlin Patten Ebling, PLLC
This communication is not intended to establish an attorney client and to the extent anything contained herein could be construed as legal advice or guidance, you are strongly encouraged to consult with your own attorney before relying upon any information contained herein.
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