The Texas legislature recently passed a bill that provides recording jurisdictions with additional clarity when conducting paper recordings of electronically executed documents.
SB 2128, which takes effect Sept. 1, addresses several uncertainties previously acknowledged in regard to remote online notarization (RON) in Texas.
Under this bill, a notary will be able to certify via an affidavit that a paper copy of a notarized electronic record is a true and correct copy, and county clerks will be required to record the transaction.
“Even though RON has been legal in Texas for nearly a year, nuances in the state’s real estate laws legislation have created unforeseen roadblocks to adoption,” explains Rick Triola, founder and CEO of remote notarization firm NotaryCam, in a release. “By passing this bill, the Texas legislature has removed doubt that a properly executed RON transaction will be accepted by county recorders statewide, thus paving the way for mortgage lenders and title/settlement professionals to begin executing remotely notarized and closed Texas-based real estate transactions.”
According to data from the Property Records Industry Association (PRIA), only 71 of the 254 counties in Texas currently offer e-recording. Thus, with the vast majority of counties lacking the capabilities to e-record, the Texas legislature correctly recognized the current state of affairs and enacted a solution to allow RON transactions to move forward regardless of a particular jurisdiction’s recording procedures.
“On a practical level, SB 2128 expands the definition of a paper document to include electronic records that have been ‘papered out,’ thus removing any doubt that these documents are eligible to be recorded in the state of Texas,” says Celia Flowers, owner of East Texas Title. “After talking to my clerks after the original RON statute went into effect last year, I quickly discovered that many of them did not know about the bill, nor did they understand what RON was. As a result, many of them – especially those that did not e-record – were not going to accept documents that had been electronically notarized.
“I think this bill resolves many of the concerns clerks had regarding RON by providing a legally accepted framework for converting electronic document into paper format for recording purposes,” Flowers adds.