TNMBA

Update on Tennessee and Remote Online Notarization (RON)

Monday, April 13th, 2020

Late last week, the Governor of Tennessee Bill Lee issued an Executive Order suspending rules to facilitate the remote online notarization of documents.  Governor Lee allowed the use of “videoconference technology such as Skype, FaceTime, Zoom, WebEx and other similar communication technologies”. However, it is extremely advisable that all parties involved seek approval from the title underwriters, secondary market loan investors, banks, non-bank lenders, warehouse lenders, and your errors and omissions insurance carriers before using this technology.  The use of RON technology can be done but lenders should exercise caution as some may try and use inadequate RON technology that may trigger rep and warrant issues for lenders or have investors reject the purchase of loan immediately.

In addition, it should be noted that most of the professional grade RON technology in the marketplace are experiencing significant on-boarding delays due the unprecedented demand that has been caused by dozens of other states approving RON technology for use in their states.  Below are the standards in place for RON technology’s use in the state of Tennessee.   

In April of 2018 the Tennessee Legislature passed Senate Bill 1758 known as the “Online Notary Public Act”. This Act is in effect as of July 1, 2019.

The Act defines “Online Notarization “as “a notarial act performed by means of two-way video and audio conference technology…”.  This means that the notary and the principal whose signature is notarized are not in the same place but interact remotely over the internet. All regular notary rules apply to these transactions including the requirement for the notary to confirm the identity and state of mind of the principal, the voluntary nature of the act and the legality of the document. This will require online notaries to have access to significant technological resources via a contract with a third-party online notary vendor.

This Act authorizes Tennessee notaries to perform online remote notarizations after the completion of an application and approval from the Tennessee Secretary of State.  Below are the steps which must be taken for a notary to perform online notarizations.

1. You must be an existing notary public.

Only those who are currently an active notary may apply to become an online notary.  Notaries Public are elected by each county. If you do not know your current status you may check it on our website here: tnbear.tn.gov/notary

2. You must apply to be an online notary and receive an online notary commission from the Secretary of State.

To perform online notarizations you must first receive an online notary commission issued by the Tennessee Secretary of State. Applicants are required to set up an online account with the Secretary of State and complete the Online Notary Application which can be found at the bottom of the page. This application must be submitted and paid online. There is an initial fee of $75.

3. You must review the applicable statute and rules before applying.

Online notarizations are governed by several new rules and statutes as well as the existing notary rules. The enacting statute is the Online Notary Public Act, TCA 8-16-301 et.seq. New Department of State Rules explaining the duties and responsibilities of online notaries as well as the procedures for applying can be found here: publications.tnsosfiles.com

4. You are required to contract with appropriate third party vendors BEFORE applying.

To apply to be an online notary, you must first have a contract with a company that will provide you with the technological support needed to perform online notarizations. This company must provide you with:             

1. The technology to be used in attaching or logically associating an electronic notarial certificate, signature and seal to an electronic document;
2. The technology to be used in conducting identity proofing and credential analysis;
3. The technology to store and maintain a recording of the video and audio conference of the online notarization session.

The Tennessee Department of State does not recommend nor endorse any particular third party vendors. The basic requirements for vendors’ technology are found in the Rules.

5. You must provide copies of materials from your vendor with your application.

To complete the online notary application you will be required to provide the following information and documentation:

1. The name of your vendor and a description of the technologies it uses to provide the services listed in section 4;
2. An explanation of the method or technology you will use to maintain an electronic notary journal as required by the Rules;
3. A copy of your unique electronic seal (see the Rules for requirements);
4. A copy of your unique electronic notarial certificate or other technology for rendering a notarized electronic document tamper-evident;
5. A copy of the  instructions or techniques supplied by the vendor that allows the online notary public’s electronic notarial certificate to be read and authenticated;
6. A copy of the instructions or techniques supplied by the vendor that allow the online notary public to conduct identity proofing and credential analysis.

These documents should be obtained from your vendor. You will attach them electronically when submitting your application.

6. Your online notary commission expires with your notary public commission.

In your application you are required to provide the dates of your current notary public commission and expiration. These must match those on file with the Secretary of State. Your online notary commission will run concurrently with your existing notary public commission and will expire on the same day, regardless of when the online commission was granted. Should you successfully reapply to be a notary public in your county, you will then be allowed to reapply to be an online notary.

Most of these parties will still require the same standards of safety and soundness that the above communication technologies fail to provide. This does allow the borrower to physically sign the documents before a remote notary. Additional thoughts to be contemplated: 

Allowing time to get the package to the borrower and making sure it complies with TRID 3 day provision?

Allowing time to get the physical signed documents to the settlement agent?

Requirements for funding number – will it be determined on upon settlement agent physically applying the notary seal?

Jeffrey F. McEvoy
Attorney, Home Surety Title and Escrow, LLC
ALTA ID 1052943