Remote Online Notarization Emerging as an Essential Business Tool in Ohio

COVID-19 Update

Date: March 27, 2020

Key Notes:

  • Use of remote online notarization in Ohio can serve as a valuable tool for those conducting business remotely.
  • Businesses interested in using remote online notarization should ensure compliance with Ohio’s remote online notarization requirements.
  • Those business seeking to use remote online notarization in connection with lending or real estate transactions should confirm with underwriters, title insurers, or other interested parties whether remote online notarization will be accepted.

As the effects of COVID-19 continue to necessitate changes in the ways businesses operate, states continue to implement ad hoc orders allowing for remote online notarization (RON). For Ohioans, RON has been possible since September 2019, but the logistics of RON in Ohio are still a mystery to some. This article is intended to clarify (at least to the extent possible) the logistics for RON in Ohio.

As an initial matter, businesses should distinguish between electronic notarization and RON. Electronic notarization, which is essentially the same as traditional notarization but with electronic signatures, requires no additional education or certification for the individual performing the notarial act (other than a traditional notary commission, of course). As a result, Ohio’s allowance for electronic notarization is unlikely to provide much aid to those attempting to conduct business under Ohio’s (or any other state’s) stay at home order.

As the name would suggest, RON, on the other hand, allows a notary located in a different physical location from the signer to notarize a document. To take advantage of Ohio’s RON option, a business must employ, or locate, an Ohio notary that is commissioned as an online notary (which requires a procedure with additional education requirements designed to cover the logistics, security, and record retention obligations that accompany RON). That said, it is important to understand Ohio’s RON provisions to ensure compliance and proper notarization of one’s documents.

Location

Although the notary must be in Ohio, the signer may be located anywhere within the United States or, in limited circumstances, outside of the U.S. Those limited circumstances include when:

  • the notarial act is not prohibited in the jurisdiction in which the signer is physically located when signing; and
  • the record is to be filed with or is before a court, governmental entity, or other entity in the U.S.; involves real or personal property in the U.S.; or is part of a transaction that is substantially connected with the U.S.
System and Identity Verification

At first glance, the standards set forth in Ohio’s RON statutes and regulations related to the electronic system and the process for verifying the signer’s identity (both described in more detail below) seem cumbersome. It is our understanding, however, that these obligations can be satisfied using industry standard platforms that meet the Ohio Secretary of State’s requirements. If platforms other than those that have already been used in Ohio are being considered to conduct RON in compliance with Ohio’s statutes, we recommend seeking the Ohio Secretary of State’s approval of those platforms in advance.

All online notarizations must occur with the use of an online notarization system that supports two-way live audio and video conferencing and must conform to several additional technical requirements. The system must:

  • allow the notary and the signer to simultaneously see and speak to one another via a live, real time, and secure transmission;
  • provide audio clarity and video resolution that enables the notary to communicate with the signer, verify the signer’s identity, and confirm that the electronic document presented is the same as the electronic document notarized;
  • provide a method for viewing and affixing the notarial certificate, signature, and seal;
  • provide a method for determining if the document has been altered after the electronic notarial seal has been affixed;
  • allow the parties to generate a paper copy of the notarized document(s); and
  • support certain identification procedures, including providing for credential analysis and identity proofing (discussed more fully below).

As with any notarial act, it is necessary that the notary be able to verify the identity of the signer. If the notary has personal knowledge of the signer, nothing more is required. If, however, the notary and the signer do not have a preexisting relationship, the notary must verify the signer’s identity using remote presentation of an unexpired government ID that contains a photograph and signature, credential analysis, and identity proofing.

Alternatively, the notary can accept an oath or affirmation of a single credible witness who personally knows the signer. While this, at first glance, appears to ease the burden that accompanies credential analysis and identity proofing, the notary must verify the identity of the credible witness by personal knowledge or via presentment of a government-issued ID, credential analysis, and identity proofing. Put simply, if the notary does not have a personal relationship with the signer or someone who has a personal relationship with the signer, credential analysis and identity proofing are required.

Credential analysis and identity proofing must be performed by a reputable third person (i.e., the platforms referenced above). For credential analysis, the notary must use public or private data sources to confirm the validity of the signer’s government issued ID. The credential analysis must, at a minimum:

  • provide an automated process, via software, for aiding the notary in verifying the signer’s identity;
  • confirm the authenticity of the ID through a process “consistent with sound commercial practices,” including by using information available via an authoritative source to confirm details contained in the ID;
  • enable the notary to visually compare the signer to the ID;
  • confirm that the ID is an unexpired, government-issued credential that contains a photograph and signature, and that may legally be imaged, photographed, or recorded; and
  • provide a procedure for an image capture of sufficient image resolution to confirm that the signer is in possession of the ID at the time of the notarial act, that the ID has not been manipulated, and that the ID provided matches the ID in the possession of the signer.

Identity proofing requires the notary to prove a signer’s identity via “knowledge-based authentication.” The signer must answer a quiz consisting of at least five multiple choice questions (formulated from public or private data sources) regarding the signer’s personal history or identity. The signer has two minutes to answer each question and must answer at least 80% of the questions correctly. If the signer fails, he or she may retake the quiz twice within 48 hours, though at least 40% of the questions must be different upon retaking, and the signer may not retry the quiz with the same notary or the same third person providing the identity proofing for at least 24 hours.

Refusal to Perform and Technical Difficulties

The notary must refuse to perform an online notarization if:

  • the notary cannot verify the identity of the signer;
  • the notary cannot verify the security of the two-way audio-video transmission;
  • the signature of the signer cannot be attached to the electronic document; or
  • the system cannot render the notarial act tamper-evident.

In the event of a technological issue or a situation where the notary or the signer must exit the audio-video communication, the identity authentication process and any incomplete online notarial acts must be started from the beginning.

Takeaways

In an increasingly technology-dependent business environment, the ability to use and rely on RON is poised to become essential for businesses seeking to maintain a competitive edge. Organizations that permit working remotely, or are considering adopting remote work policies, should consider making use of RON as a means of maximizing efficiency and minimizing potentially expensive externalities such as travel time. That said, businesses should ensure that the documents being notarized will be accepted, especially in instances where the notarized document is to be recorded or otherwise filed with a government agency. For those businesses that plan to use RON for documents involving loans or real estate, confirming with the underwriter or title insurer that RON will be accepted, that the loan will be funded, and that the title will be insured, is crucial.

FOR MORE INFORMATION

For more information, please contact:

Jessica E. Salisbury-Copper
937.443.6854
Jessica.Salisbury-Copper@ThompsonHine.com

Joe Barton
937.443.6805
Joe.Barton@ThompsonHine.com

Additional Resources

We have assembled a firmwide multidisciplinary task force to address clients’ business and legal concerns and needs related to the COVID-19 pandemic. Please see our COVID-19 Task Force page for additional information and resources.

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