In normal times, the ink signature and the stamp from a notary are simple cogs in the machinery of business transactions, a final confirmation that a deal has been struck, that a crucial document is authentic. But these are definitely not normal times.
The gears are getting jammed in the social-distancing era. Many real estate closings are happening on the hoods of cars, in parking lots. (Better hope it doesn’t rain!) Some patent transfers will take place, but without the added legal protection of a notary’s stamp. Many wills and other estate documents are simply being put on hold.
Various constituencies representing the interests of probate attorneys, real estate lawyers, bankers, insurers, and credit unions have teamed up on a proposed solution: a bill that would allow notaries to endorse documents via videoconference. This loose-knit coalition, including the retirement plan giant Fidelity Investments, proposed legislation to the House and Senate on Thursday.
It’s the second effort to pass a remote-notarization bill amid the COVID-19 pandemic. Real estate and probate lawyers pushed a version last month, one that would have allowed notaries to witness documents via video during this state of emergency. Its champions included Senators Bruce Tarr, John Keenan, and Will Brownsberger. The plan was to move the legislation to Governor Charlie Baker by attaching it to a larger municipal aid bill, a move endorsed in the Senate. But the House apparently balked, and the notarization measure was stripped from the bill that Baker signed into law April 3.
Maybe a stronger piece of legislation could emerge as a result. The new version has been expanded to include notaries who aren’t attorneys or paralegals — though lawyers would still need to be substantially involved with any real estate closings. The language has also been tweaked to ensure that mortgages closed via this route would conform with the standards of Fannie Mae and Freddie Mac, the two big buyers of home loans on the secondary market.
The Legislature has been meeting in informal sessions since the pandemic hit; they consist of lightly attended votes and no roll calls, when just one lawmaker has the power to block a bill. Significant bills are not typically passed in informal sessions.
Ruth Mattson, an estate planning lawyer at Vacovec, Mayotte & Singer in Newton, said more than 40 states allow for some kind of remote notarization, either specifically for this emergency or on a permanent basis. In her practice, about 80 percent of estate plans ready for signing are on hold, awaiting a remote-notarization bill to become law. She said only clients at greatest risk of sickness and death are signing estate planning documents now — wills, trusts, health care proxies, and the like — and they’re the ones who need the most protection.
Debbie Sousa, head of the Massachusetts Mortgage Bankers Association, sent an e-mail Thursday to rally the troops. She urged her group’s members to contact their reps and senators and tell them to make remote notarization a priority. (It can’t hurt, she said, to drop the hint that Massachusetts is the only state in New England that still doesn’t allow it.)
The Greater Boston Chamber of Commerce is also on board. Chief executive Jim Rooney said the impact would go well beyond the real estate and probate worlds to include banking, insurance, retirement plans, and corporate governance. Rooney said he has heard concerns about remote notarization opening the door to more fraud. But the bill includes safeguards, he noted, and is intended to be temporary. Trying to write the perfect bill, he said, could get in the way of addressing an urgent need.
With more parties on board this time, there’s a renewed sense of optimism. Jon Skarin, executive vice president at the Massachusetts Bankers Association, hopes the consensus that’s been reached among various groups will persuade lawmakers to pass the new version sometime next week.
This version differs somewhat from true electronic notarization — that is, document verification without any ink signature or physical stamp. Sousa notes that this bill would simply put procedures in place to allow documents to be notarized via a videoconference.
She would like to renew the push for “remote online notarization,” as it’s known, when normal times return. That will be a tougher sell, a much more dramatic change. For now, she just wants a better way to avoid all those in-person meetings that everyone once took for granted.