After allowing remote online notarizations as an emergency measure during the pandemic, New York state has passed a law permanently legalizing the practice in a move welcomed by real estate and housing finance groups.
New York Governor Kathy Hochul signed the new law on Dec. 22 and it will be effective on June 20, 2022, making New York one of 40 states that allow remote online notarizations (RONs), according to Bill Anderson, vice president of government affairs with the National Notary Association.
Ten other states enacted permanent remote online notarization laws in 2021 — Alabama, Arkansas, Illinois, Kansas, New Hampshire, New Jersey, New Mexico, Oregon, West Virginia and Wyoming — leaving California and North Carolina among the more notable holdouts, Anderson wrote in a Dec. 1 bulletin.
Hochul had previously authorized the use of remote electronic notarization services in a March 2020 executive order due to the coronavirus pandemic. New York Assemblywoman Nily Rozic (D-Queens) and Sen. James Skoufis (D-Cornwall) introduced legislation, S.1780-C, to make the change permanent.
“Reforming the antiquated process of notarization isn’t just a matter of efficiency, it’s about offering equitable access to this necessary service for those who are homebound or otherwise unable to engage a notary,” Skoufis said in a statement.
“I am grateful to all of the stakeholders involved in this long-running effort to bring electronic notarization to the fore, and to the Governor for her signature on this important legislation. I am proud to have a hand in pulling New York into the 21st century.”
In a statement, Rozic said, “Despite the increasing notarizations that occur every year, the industry has not adapted to societal changes and technological advances. Notarization still requires people to be physically present in front of a notary public, despite technology that would allow for the same — or increased — security over video conference calls.”
The Real Estate Board of New York (REBNY) and the New York State Association of Realtors (NYSAR) applauded the governor for signing the legislation, saying the law “will play an important role in modernizing real estate closing transactions” in the state.
“We applaud Governor Hochul for taking this important step to modernize and streamline real estate closing transactions, and we thank Senator Skoufis and Assemblymember Rozic for sponsoring the legislation,” the trade groups said in a statement.
“As the economic activity generated by the real estate industry continues to play a critical role in supporting New York’s long-term recovery, this smart policy approach will help advance that economic progress while also providing a practical solution for hardworking members of the industry.”
The New York Credit Union Association, which backed the measure, declared its passage as “a major legislative victory for the New York credit union movement” and noted that credit unions and other institutions in the state had successfully used the technology during the pandemic.
“This law is certainly a victory for credit unions, but it’s also a victory for the disabled, elderly, those in rural communities and others who may find it difficult to obtain the services of a notary in person,” said William J. Mellin, president and CEO of NYCUA, in a statement. “New York now joins a growing list of states that have authorized this practical and modern technology.”
California Assemblymember Reggie Jones-Sawyer introduced a bill in February, AB 1093, that would legalize remote online notarizations in the state. The bill has been referred to the Assembly’s judiciary committee.
The New York State Land Title Association (NYSLTA) said it had fought hard for the legislation and praised its passage.
“This legislation will help to streamline the notarization process as our industry continues to adapt,” said Bob Treuber, the association’s executive vice president, in a statement.
The association noted that the new law will feature added levels of security, including verification of parties, for safe and secure transactions. According to an analysis by the law firm Holland & Knight, the new law requires the New York Secretary of State to set forth standards “for ensuring the audio/video conference used for the notary session is secure, the notary session is conducted in real time and the notary is able to communicate with and identify the signer at the time of the notarial act.”
The law firm also expects ID verification to involve credential analysis of a signer’s ID card, such as a passport or driver’s license, and correctly answering four out of five knowledge-based authentication questions within a set period of time.
“New York’s passage of the remote online notarization law will help to simplify real estate transactions across the state,” said Chris Hultzman, vice president of corporate underwriting at First American Title Insurance Company, in a statement.
“This new law will provide greater convenience to home buyers and sellers, and will also benefit the title industry, the mortgage industry and the real estate industry in general as real estate transactions become more digital.”
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