- New Jersey Gov. Phil Murphy signed Assembly Bill No. 4250 into law on July 22, 2021. In addition to overhauling New Jersey's existing law governing notaries public (Notaries), the new law – New Jersey Law on Notarial Acts (Act) – permanently authorizes New Jersey Notaries to conduct in-person notarizations of electronic documents and remote online notarizations of electronic and tangible documents.
- The Act comprehensively governs the commissioning process for Notaries, including establishing initial and continuing education and initial testing requirements to be approved by the State Treasurer, who is assigned the task of administering and enforcing the Act.
- Of most interest to financial institutions and the focus of this Holland & Knight alert, however, are the provisions in Sections 13 through 19 of the Act.
New Jersey Gov. Phil Murphy signed Assembly Bill No. 4250 into law on July 22, 2021. In addition to overhauling New Jersey's existing law governing notaries public (Notaries), the new law – New Jersey Law on Notarial Acts (Act) – permanently authorizes New Jersey Notaries to conduct in-person notarizations of electronic documents and remote online notarizations of electronic and tangible documents. It effectively replaces a temporary law passed in April 2020 (L. 2020, c. 26, discussed in a previous Holland & Knight alert, April 17, 2020) that authorized these types of notarizations to help deal with the COVID-19 public health emergency. That law will formally expire upon the termination of the public health emergency and the state of emergency declared by the governor in Executive Order 103 of 2020. Although the public health emergency is now terminated, the state of emergency remains in place until terminated by the governor.
The Act is modeled on the Revised Uniform Law on Notarial Acts (2018) drafted by the National Conference of Commissioners on Uniform State Laws. It comprehensively governs the commissioning process for Notaries, including establishing initial and continuing education and initial testing requirements to be approved by the State Treasurer, who is assigned the task of administering and enforcing the Act. In addition, the Act sets forth the requirements, functions, duties and responsibilities of commissioned Notaries (including the requirement to maintain and retain a journal of all notarial acts performed); delineates Notaries' authority to perform notarial acts and establishes the requirements that they must fulfill to perform specific notarial acts; and gives notarial acts performed by Notaries in other states or countries the same effect as if performed by a New Jersey notary. Licensed New Jersey attorneys are exempted under the Act from the requirement to be commissioned and the qualifications to obtain a commission.
Authority to Conduct E-Notarizations and RONs
Of most interest to financial institutions and the focus of this Holland & Knight alert, however, are the provisions in Sections 13 through 19 of the Act. These provisions give New Jersey Notaries the authority to notarize 1) electronic documents signed by an individual in the physical presence of the notary (e-Notarizations), and 2) tangible and electronic documents through the use of "communication technology" in cases where the individual signing the document is in a different location than the notary (remote online notarizations or RONs). However, RONs may not be used to notarize electronic documents governed by "a law governing the creation and execution of wills or codicils." An individual signer who is in a different location than the notary is referred to in the Act as a "remotely located individual" (RLI).
With regard to RONs, the key provision in the Act states:
A [notary] located in this State may perform a notarial act using communication technology for a [RLI] if:
(1) the [notary]: (a) has personal knowledge … of the identity of the [RLI]; (b) has satisfactory evidence of the identity of the [RLI] by oath or affirmation from a credible witness appearing before the notarial officer [either in person] or using communication technology…; or (c) has obtained satisfactory evidence of the identity of the [RLI] by using at least two different types of identity proofing;
(2) the [notary] is able reasonably to confirm that a record before the [notary] is the same record in which the [RLI] made a statement or … executed a signature; [and]
(3) the [notary], or a person acting on behalf of the [notary], creates an audio-visual recording of the performance of the notarial act [and retains it, or has a third party retain it on his/her behalf, for at least 10 years (or any shorter period established by regulation of the Treasurer)].
If the RLI is located outside the United States, the following additional requirements apply:
(1) The record being notarized must be one that "(i) is to be filed with or relates to a matter before a public official or court, governmental entity, or other entity subject to the jurisdiction of the United States" or "(ii) involves property located in the … United States or involves a transaction substantially connected with the United States"; and
(2) the act of making the statement or signing the record is not prohibited by the foreign state in which the [RLI] is located.
The terms "communication technology" and "identity proofing" are defined in Section 18 of the Act.
"Communication technology" is an electronic device or process that allows a notary and a RLI to "communicate with each other simultaneously by sight and sound" and, "when necessary and consistent with other applicable law, facilitates communication with a [RLI] who has a vision, hearing, or speech impairment."
"Identity proofing" is a process or service by which a third person, typically a technology vendor, provides a notary with a means to verify the identity of a RLI "by a review of personal information from public or private data sources." Identity proofing can be accomplished in a variety of ways, including by the use of confidential passwords, biometrics or, most commonly (because it does not involve an extra step such as obtaining a private password or filing the biometric data in a repository), "knowledge-based authentication" (KBA). A typical KBA session would require the RLI to correctly answer, within two minutes, at least four out of five dynamic personal questions – questions as to which only the RLI could reasonably be expected to know the answers.
Ability to Use RONs to Notarize Paper Documents
The vast majority of RONs are used to notarize electronic documents. Because electronic documents can be visible to individuals in different locations at the same time, it is a relatively simple matter for a notary to confirm that the record before him/her is the same record that the RLI has signed. However, RONs can also be used to notarize tangible (i.e., paper) documents. The Act provides that a notary fulfills the requirement to confirm that a tangible document that is in the notary's possession is the same document that the RLI signed if the document is simply displayed to and identified by the RLI during the audio-visual session. If, however, the document is not in the notary's possession, fulfillment of the confirmation requirement is more complicated. The Act provides in such a scenario that the confirmation requirement is satisfied only if:
- The RLI –
- during the audio-visual session, signs the document and declares in writing, either in or attached to the document and under penalty of perjury, that the document is the same one on which the notary before whom the RLI appeared by means of communication technology performed the notarial act; and
- sends the signed document and declaration to the notary not later than three days after the notarial act was performed; and
- The Notary –
- records, in the audio-visual recording of the session, the signing of the document and declaration by the RLI; and
- after receipt of the signed document and declaration from the RLI, executes the certificate of notarial act, which must include the following statement: "I [name of notarial officer] witnessed, by means of communication technology, [name of RLI] sign the attached record and declaration on [date]".
The Act also provides, however, that these methods of satisfying the confirmation requirement are not exclusive, and that the State Treasurer may prescribe other methods.
Full Faith and Credit
As indicated above, the Act affords to notarial acts performed by Notaries in other states or countries the same force and effect as if they were performed in New Jersey by a New Jersey notary in accordance with applicable New Jersey law. Most states either have a similar provision in their laws governing notarial acts or extend the same recognition to notarizations conducted in another state by commissioned notaries in that state as a matter of custom and comity. Consistent with the above, Section 18 of the Act expresses the legislature's intent that full faith and credit be granted by other states to notarial acts performed in New Jersey by a New Jersey notary (including those involving RLIs).
The State Treasurer is authorized, but not required, by the Act to adopt regulations: 1) prescribing the means of conducting RONs, 2) establishing standards for communication technology and identity proofing, 3) establishing requirements or procedures to approve providers of communication technology and the process of identity proofing, 4) establishing standards and a period for the retention of the audio-visual recordings of RONs, and 5) prescribing methods for fulfilling the Notaries' confirmation requirement with respect to RONs involving tangible documents.
The Act generally becomes effective on the 90th day following its enactment. The only exceptions are the provisions establishing the initial and continuing education and the initial testing requirements for Notaries, which will not become effective until the 365th day after enactment.