Most States Have Approved Electronic Notaries, But New York is Complicated

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New York State recently passed legislation that authorizes electronic notarizations. For transactions that involve participants who are out of the area, or even out of the country, this can be a tremendous convenience. New York Executive Law 135-c, which was signed into law on December 31, 2022, seems like a great leap forward. But the devil, as they say, is in the details, and the details say, “Not so fast.”

Cornerstone Insights

The vast majority of states (46 as this is being written) allow electronic notarization, subject to certain security measures to ensure that the notary can reliably determine that the people signing documents are who they say they are.

The issue in New York is that the governor may have signed the new law, but the secretary of state and the state legislature haven’t solidified the requirements yet. Essentially, the electronic platforms and procedures that notaries use in other states don’t meet New York’s standards, which are believed to be more rigorous than other those in other states.

Because New York requires that signatures must be verified by a New York state notary, and no New York state notaries can currently do so electronically, documents can’t currently be recorded (and settlements can’t happen) unless participants work with a notary in person.

Don’t conflate this with electronic, remote settlements, which are perfectly legal. But for now, plan on using old-school, in-person notarization. Cornerstone is continually monitoring the situation, and we’ll keep you informed as things change.

If you have any questions about electronic notarization or any part of the buying and selling process, or if you would like to discuss an upcoming or prospective transaction, please contact us.