Editorial: Notarize Is Not The Right Answer
Posted on October 18, 2016
I saw an ad recently for a company called Notarize, Inc. Here is the pitch:
Thanks to the commonwealth of Virginia, no matter where you live in the U.S., your documents can now be notarized online by a trusted notary.
Upload and annotate any document, verify your identity, and connect with an eNotary in minutes. All handled securely through the Notarize app. Once done, print or share your notarized document electronically.
Notarize from anywhere in the world with your device. All you need is a webcam, Valid ID, and your document.
My first thought was, how on earth can this be legal? Under Massachusetts law (the only notary public law that I’m really familiar with), the notary must be in the physical presence of the affiant or the person acknowledging the document at the time the notary administers the oath or takes the acknowledgment. Well, in 2011, the Virginia General Assembly enacted Chapter 731 of the Acts of 2011, which amended Virginia law to allow a Virginia notary to administer an oath or take an acknowledgement remotely, by audiovisual means. The new law provides that the notarial act is “deemed to have been performed within the Commonwealth and is governed by Virginia law.”
So when you use the Notarize app, you are connected remotely to a Virginia notary, who reviews the image of your ID, takes the acknowledgment or administers the oath as though physically present, and then signs the image of the document.
If administering an oath or taking an acknowledgment is a public act, then by the magic of the Full Faith and Credit Clause, each state in the US is (it seems?) required to give full faith and credit to the act. And in light of the Apostille Convention, each state party to the Convention is (it seems?) forbidden to require any additional legalization.
First, let’s talk about what’s good in this approach. One of the main problems with current notarial practice in the United States is that too often, notaries public don’t really do their main job. They will simply “notarize” a document, i.e., sign it, without performing the actual notarial act that is the whole point of requiring the notary’s signature in the first place. The use of “notarize” as a verb, to me, is an illustration of this unfortunate trend. In some instances, notaries do not even speak with the person who is supposed to be taking the oath or acknowledging the deed. A big part of the “robo-signing” scandal that was part of the US residential real estate crisis had to do with notaries not doing their jobs. I can see a platform like Notarize providing more assurance than we have today that the notary actually does what he or she is supposed to do, at least if the system saves a copy of the identification documents the notary reviews, and in particular if the system archives the video feed. (I’m not sure that the app saves the ID, but the Notarize website suggests to me that it does archive the video). A remote system can also reduce costs in time and money. This is a benefit, to be sure, though also a drawback, since the notary is supposed to serve a cautionary function. Part of the point of requiring oaths and acknowledgments is precisely to increase transaction costs in order to impress upon the affiant or the person acknowledging a deed the seriousness of the act.
Now let’s consider some drawbacks. Since this is Letters Blogatory, I want to focus on the international implications. Suppose I am in Germany and I use the app to take an oath in order to make an affidavit. I’m not a German lawyer, but I have to think this would be offensive to a state like Germany, since only officials of the German state can perform judicial acts on German territory. I analogize the situation to taking evidence abroad via videolink. On the one hand, this possibility “is considered to represent global best practice.” Annex 6, ¶ 4 to the Practical Handbook on the Operation of the Hague Evidence Convention. On the other hand, the use of videolinks “does not overcome sovereignty concerns that the State in whose territory the witness is located may have …. In these cases, the permission of the State concerned may still be required in order for the examination to take place ….” Id. ¶ 8. I don’t suppose Notarize, Inc. has asked foreign countries for permission, though perhaps it has. In any case, this seems like a serious problem to me.
No doubt others could raise concerns in the purely domestic context, too. Assuming that the Full Faith and Credit Clause ordinarily should apply to domestic notarial certificates, will states nevertheless refuse to recognize Virginia e-notarization on public policy grounds? Leaving doctrine aside, it seems to me that as a policy matter the Virginia statute is a bad idea for a few reasons. First, part of the notary’s role is cautionary. By performing the ceremony of an oath or acknowledgment, the notary impresses on the affiant or the signer the seriousness of the act. This function is probably lessened if the ceremony is performed via Skype. Second, the notary must also satisfy himself or herself that the signer is competent and not under any duress or undue influence. This is almost always a hypothetical rather than a real concern, but in the few cases where it matters, surely the notary can do a better job if he or she is in the presence of the signer, to see who else is nearby, to observe demeanor, etc. Take the case of residential mortgages, which is, I suspect, the main driver behind the Notarize, Inc. concept. There are obvious and significant economic reasons why the secondary market in residential mortgages has been pushing for digitalization for some time. We already have MERS as the holder of legal title to property to allow promissory notes secured by mortgages to be traded quickly and efficiently. The requirement of a notary meeting the borrower face-to-face can be a brake and a check on fraud and undue influence.
So in short, I think the Notarize, Inc. product is a bad idea. But as I noted, I think it has some good features. In particular, it has the potential to avoid disputes about what occurred during an acknowledgment or the execution of an affidavit by creating a video record of the proceeding and a digital copy of the identification offered and the document signed. Maybe the best answer is to apply these technologies to improve the traditional in-person interaction between the notary public and the affiant or document signer.