Bulletin: NC2022001

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Bulletin: NC2022001

Bulletin Document
V 5
Date: August 09, 2022
To: All North Carolina Issuing Offices
RE: UNDERWRITING - Remote Electronic Notarization and Emergency Video Notarization

Dear Associates:

On July 8, 2022, Governor Roy Cooper signed House Bill 776 (see attached), which amends the North Carolina Electronic Notary Public Act found in Chapter 10B of the North Carolina General Statutes by adding a new Part 4A under Article II of Chapter 10B: Remote Electronic Notarization. Part 4A, Remote Electronic Notarization goes into effect on July 1, 2023.

Requirements for remote electronic notarizations in North Carolina under the new part include:

1. The notary public must be physically located in the State of North Carolina (N.C.G.S. 10B-134.7(a) and registered with the North Carolina Secretary of State (N.C.G.S. 10B-134.1(9)) to perform remote electronic notarizations (a notary public that meets these qualifications hereinafter referred to as “Remote Electronic Notary”).

2. The Remote Electronic Notary must use Communication Technology [defined in N.C.G.S. 10B-134.1(1) as an electronic device, process, or system that allows a Remote Electronic Notary and a Remotely Located Principal (see section 3 below for definition of a Remotely Located Principal) to communicate with each other simultaneously by sight and sound using audiovisual technology and that makes reasonable accommodations for Remotely Located Principals with vision, hearing, or speech impairments] through a Platform [defined in N.C.G.S. 10B-134.1(6) as the online platform utilizing the communication technology to perform the remote electronic notarial act] licensed by the North Carolina Secretary of State or the Secretary’s designee (hereafter “Secretary”)(N.C.G.S. 10B-134.19) that complies with all of the following requirements (NCGS 10B-134.5):

a. Host the meeting between the Remote Electronic Notary and the Remotely Located Principal in real time.

b. Allow direct interaction between the Remotely Located Principal seeking the Remote Electronic Notary’s services and the Remote Electronic Notary so that each can communicate simultaneously by sight and sound through Communication Technology.

c. Include audio with sound clear enough that each participant in the Remote Electronic Notarial Act (Remote Electronic Notarization or Remote Electronic Notarial Act is defined in N.C.G.S. 10B-134.1(8) as a notarial act performed by means of Communication Technology) can hear and understand all other participants.

d. Have sufficient video quality to allow a clear and unobstructed visual observation of the face of each participant and any identification provided by the Remotely Located Principal for a sufficient time to allow the Remote Electronic Notary to verify the Remotely Located Principal’s identity under N.C.G.S. 10B-134.11. The Remote Electronic Notary shall determine if the time is sufficient.

e. Not include prerecorded video or audio or both.

f. Be capable of recording using the Communication Technology’s recording and storage services.

g. Be capable of geolocating the Remotely Located Principal to corroborate the location of the Remotely Located Principal.

3. A Remotely Located Principal is defined as a principal who is not in the physical presence of the Remote Electronic Notary and who is located at the time of the Remote Electronic Notarial Act in any of the following places pursuant to N.C.G.S. 10B-134.1(10):

a. Inside the United States.

b. Outside the United States and physically on the military installation or vessel named in the military orders assigning the member to active duty for more than 120 days, provided the Remotely Located Principal is a member, spouse of a member, or dependent of a member of the Armed Forces of the United States.

c. Outside the United States at any of the following locations:

(i) United States Embassy.

(ii) United States consulate.

(iii) Unites States Diplomatic Mission.

4. Pursuant to N.C.G.S. 134.9(a), all of the following shall occur prior to the performance of a Remote Electronic Notary Act:

a. The Remote Electronic Notary shall inform the participants that North Carolina law requires that a Communication Technology recording be made of the Remote Electronic Notarization (pursuant to N.C.G.S. 10B-134.13 each Remote Electronic Notarization shall include a Communication Technology Recording).

b. The Remote Electronic Notary shall require the Remotely Located Principal to demonstrate, to the satisfaction of the Remote Electronic Notary, that the Remotely Located Principal is not under duress and is not otherwise being coerced to complete the transaction.

c. The Remote Electronic Notary shall verify the identity of the Remotely Located Principal by one of the following methods pursuant to N.C.G.S. 10B-134.11:

(i) The Remotely Located Principal creating the electronic signature is personally known to the Remote Electronic Notary.

(ii) All of the following:

1. Credential analysis (defined in N.C.G.S. 134.1(3) as a process or service through which a third-party vendor performs a remote analysis of the characteristics and security features of each identification of the Remotely Located Principal pursuant to N.C.G.S. 10B-3(22)(a)), by a third-party vendor approved by the North Carolina Secretary of State or the Secretary’s designee (hereinafter “Secretary”), of a current document issued by a federal, state, or federal or state-recognized tribal government agency bearing the photographic image of the individual’s face and either the signature or a physical description of the individual.

2. Identity Proofing (defined in N.C.G.S. 10B-134.1(5) as a process or service through which a third-party vendor affirms the identity of a Remotely Located Principal through review of personal information from public or proprietary data sources) by a third-party vendor approved by the Secretary.

3. Comparison, by the Remote Electronic Notary, of the current document issued by a federal, state, or federal or state-recognized tribal government agency bearing the photographic image of the individual’s face and either the signature or a physical description of the individual presented by the Remotely Located Principal during credential analysis and the image of the Remotely Located Principal via the Communication Technology.

a. Notwithstanding the above, a Remote Electronic Notary may require the Remotely Located Principal to provide additional information or identification credentials necessary to confirm the identity of the Remotely Located Principal.

d. The Remote Electronic Notary shall ask the Remotely Located Principal if the Remotely Located Principal would like an attorney to participate in the remote notarization and allow for such if so requested.

e. The Remotely Located Principal shall verbally state what documents are being signed for the notarial record or describe the general nature of the transaction.

f. The location of the Remotely Located Principal shall be verified by geolocation via Communication Technology.

5. A Remote Electronic Notary shall refuse to perform a Remote Electronic Notarial Act if any of the following applies (N.C.G.S. 10B-134.9(b)):

a. The Remote Electronic Notary has reasonable grounds to believe the Remotely Located Principal is acting under duress or is being coerced into completing the transaction.

b. The Remote Electronic Notary becomes aware that the Communication Technology is not secure.

c. The electronic signature of the Remotely Located Principal cannot be attached to the electronic document for signature.

d. Unless an oath is being administered, the Remote Electronic Notary’s Electronic Notarial Certificate and seal cannot be attached to the electronic document using an electronic technology that renders any subsequent change or modification to the document evident.

(i) Remote Electronic Notary Certificate is defined in N.C.G.S. 10B-134.1(7) as the portion of a notarized electronic document that is completed by the Remote Electronic Notary and contains all of the following (1) The Remote Electronic Notary’s electronic signature and the Remote Electronic Notary’s electronic seal (2) The facts attested to by the Remote Electronic Notary in a particular notarization (3) A statement in the acknowledgment, jurat, or verification certificate identifying where the Remotely Located Principal was physically located at the time of the remote electronic notarization (4) A statement that the notarization is a Remote Electronic Notarization performed using Communication Technology by a Remote Electronic Notary.

e. Prohibitions contained in N.C.G.S. 10B-134.3 and N.C.G.S. 10B-20, which include:

(i) The Remotely Located Principal’s identity cannot be verified.

(ii) The notary is a signer of, party to, or beneficiary of the record, that is to be notarized (with exceptions for trustee in a Deed of Trust, drafter of the record, person to whom a registered document should be mailed and attorney for a party to the record).

(iii) The notary will receive directly from a transaction connected with the notarial act any commission, fee, advantage, right, title, interest, cash, property, or other consideration exceeding in value the fees specified in N.C.G.S. 10B-31, other than fees or other consideration paid for services rendered by a licensed attorney, a licensed real estate broker or salesperson, a motor vehicle dealer, or a banker.

6. Pursuant to N.C.G.S. 10B-117, in performing an electronic or remote electronic notarial act, all of the following components shall be attached to, or logically associated with, the electronic document by the electronic notary or Remote Electronic Notary, all of which shall be immediately perceptible and reproducible in the electronic record to which the notary’s Electronic Signature is attached:

a. The notary’s name, state, and county of commissioning exactly as stated on the commission issued by the Secretary.

b. The words “Electronic Notary Public” or “Remote Electronic Notary Public Utilizing Communication Technology”.

c. The words “State of North Carolina”.

d. The expiration date of the commission.

e. The notary’s Electronic Signature (Electronic Signature is defined in N.C.G.S. 10B-101(6) as an electronic symbol or process attached to or logically associated with an electronic document and executed or adopted by a person with the intent to sigh the document).

f. The completed wording of one of the following notarial certificates:

i. Acknowledgment.

ii. Jurat.

iii. Verification or proof.

7. Pursuant to N.C.G.S. 10B-134.15 a Remote Electronic Notary who performs a Remote Electronic Notarization shall enter information about the Remote Electronic Notarization in an Electronic Journal (defined in N.C.G.S. 10B-134.1(4) as a secure record of Remote Electronic Notarial Acts that contains the information required under N.C.G.S. 10B-134.15). The Secretary shall adopt rules regarding the content and secure storage of the Electronic Journal. The rules adopted by the Secretary shall comply with all of the following:

a. Allow for electronic and paper mediums of the electronic journal.

b. Require retention for 10 years after the Remote Electronic Notarization.

c. Allow a party involved in a transaction that utilizes Remote Electronic Notarization to require additional information regarding that transaction be included in the Electronic Journal.

d. Authorize a third-party vendor, including a licensed platform, to act as a depository Electronic Journal.

e. Specify to whom the Electronic Journal shall be delivered upon resignation, revocation, or expiration of a notary commission or death or adjudication of incompetency of a Remote Electronic Notary.

8. Pursuant to N.C.G.S. 10B-134.3(e) no remotely notarized power of attorney may be used by the attorney-in-fact with any other remotely notarized document to convey title to, or transfer any interest in, a Remotely Located Principal’s real property. A power of attorney executed by a Remoted Located Principal under this Part shall be recorded in at least one county register of deeds office in North Carolina. This does not apply to powers of attorney executed by a Remotely Located Principal that is outside the US and physically on the military installation or vessel named in the military orders assigning the member to active duty for more than 120 days, provided the Remotely Located Principal is a member, spouse of a member, or dependent of a member of the Armed Forces of the United States.

9. Pursuant to N.C.G.S. 10B-134.25 nothing in this part shall be construed to alter or supersede the law as set forth in Chapter 84 of the General Statutes, N.C.G.S. 10B-20(i) through (k), N.C.G.S. 75-1.1, or any opinion or ruling by a North Carolina court of competent jurisdiction or the North Carolina State Bar ruling pertaining to the unauthorized practice of law in this State, including the requirements that a licensed North Carolina attorney shall supervise a residential real estate closing under Authorized Practice Advisory Opinion 2002-1 issued by the North Carolina State Bar and perform all services defined as the practice of law for real property located in North Carolina. A Remote Electronic Notary who is not a licensed North Carolina attorney is prohibited from rendering services or advice that constitutes the practice of law in North Carolina.

Stewart agents may insure transactions notarized consistent with the Part 4A of Article 2 of Chapter 10B after the law goes into effect on July 1, 2023.

EMERGENCY VIDEO NOTARIZATION

Another provision of House Bill 776 amends N.C.G.S. 10B-25 which deals with emergency video notarization. This provision went into effect as of July 8, 2022, and acts to extend the dates of emergency video notarization until June 30, 2023, and is retroactive to cover any emergency video notarizations that were done after December 31, 2021, and before this act became effective provided they were done in conformity with N.C.G.S. 10B-200 as it existed on December 31, 2021. While there are a few minor changes to the emergency video notarization statute, the general requirements remain the same. Through June 30, 2023, Stewart agents may insure transactions notarized consistent with N.C.G.S. 10B-25, 10B-200 and 10B-201 that also complies with our Company guidelines as set out in Bulletin NC2020004.

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.

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THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER  AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.


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