Because of COVID-19, many of us are working remotely. Fortunately, in Maryland, we operate in an environment in which documents may be drafted, negotiated, executed, acknowledged, and recorded from the comforts of our homes.
In Maryland, documents are generally not required to have a “wet ink” signature — that is, signed with a pen — in order to be effective. Instead, electronic signatures may be used.
Maryland has adopted the Uniform Electronic Transactions Act (UETA), which is found at Maryland Code, Commercial Law Article (CL) §21-101 et seq . UETA has been adopted in 48 states, the District of Columbia and the U.S. Virgin Islands. UETA is similar in effect to the federal Electronic Signature in Global and National Commerce Act, 15 UCCA § 7001 et seq. (E-SIGN). Because of the similarity of the two laws, under E-SIGN, UETA controls in Maryland. UETA provides that (a) if a law requires a record to be in writing, an electronic record satisfies the law, and (b) if a law requires a signature, an electronic signature satisfies the law.
Under UETA, “electronic signature” means an electronic sound, symbol or process attached to or logically associated with particular information and executed or adopted by a person with the intent to sign.
Under UETA, when the parties to a business contract agree to use an electronic signature, the electronic signature ordinarily will have legal effect. Electronic signatures may include signatures in emails, pdfs, and faxes, as well signatures through commercial firms, such as DocuSign and Adobe Sign. The important point is that the “signature” must be affixed to or associated with the relevant agreement with an intent to sign.
Other provisions of the Maryland Code also authorize electronic signatures. The Corporations and Associations Article (C&A) defines the word “sign” as to execute or otherwise adopt a name, symbol, word, mark or process with the present intent to authenticate or adopt a record or identify oneself, and it states that the word “sign” specifically includes an electronic signature. C&A §1‑101(z). The Real Property Article (RP) §3-702(b) provides: “If a law requires, as a condition for recording, that a document be signed, an electronic signature satisfies the law.” RP §3‑702(c) permits documents to be notarized, acknowledged, verified and witnessed with electronic signatures.
Maryland courts have held that email communications can by binding on the parties. See MEMC Elec. Materials, Inc. v. BP Solar Int’l, Inc., 196 Md. App. 318, 339–40, 9 A.3d 508, 521 (2010); and Still Point Wellness Centers, LLC, et al. v. Columbia Association, Inc., No. 1433, Sept. Term 2017, 2019 WL 1949620 (Md. Ct. Spec. App. April 30, 2019).
By its own terms, UETA applies only to transactions between parties that have agreed to conduct transactions by electronic means. Under CL §21-104(b)(3) a “standard form contract” may not contain the authorization to conduct the transaction electronically unless that provision is conspicuously displayed and separately consented to.
As for documents that are not standard form contracts, the agreement of the parties can be implicit, and it can be based on the applicable circumstances, including the conduct of the parties. If all parties to a contract sign that contract electronically, they have obviously consented to the use of electronic signatures. A provision in a contract providing that the parties have agreed to accept electronic signatures is particularly useful if one party signs electronically but another does not.
Many agreements in common usage contain a provision that allows for originals of the agreements to be transmitted to the parties electronically and for each of the copies to have the same force and effect as the original has. However, this type of clause may not be sufficient to permit the use of electronic signatures on the documents, because they relate to the manner of circulating copies of agreements rather than to the formation of agreements.
There is bad news and good news regarding remote notarizations in Maryland. The bad news is that the Revised Uniform Law on Notarial Acts (RULONA), which authorizes remote notarizations, will not go into effect in Maryland until October 1, 2020. The General Assembly enacted RULONA during its 2019 session (Senate Bill 678/Chapter 407) and amended it during the 2020 legislative session (Senate Bill 636/Chapter 571), but RULONA has a delayed effective date here.
The good news is that Governor Lawrence Hogan issued Executive Order No. 20-03-30-04 on March 30, 2020, that permits remote notarizations during the pendency of the COVID-19 crisis. The Maryland Secretary of State issued temporary guidelines, published in the Maryland Register on April 24, 2020. The order and the guidelines waive the in-person requirement for notaries and permit current notaries to act as remote notaries.
Remote notarizations must be performed using a technology platform approved by the Secretary of State. The platform must permit the notary and the person signing documents to hear and see each other. The signing and acknowledgment session must be recorded, and the notary must retain the recording. However, the guidance from the Secretary of State does not state for how long the recording must be kept.
All regular requirements relating to notaries remain in effect and apply to remote notarizations. For example, the notary must personally know the signatory or must have satisfactory evidence of the identity of the signatory. Also, the notary may not charge more than $4. Anyone with a commission as a notary may continue to perform in-person notarial acts.
The Secretary of State’s office has advised that the remote notary must be physically within Maryland when taking an acknowledgment, but the signatory of the documents need not be in Maryland.
It is useful for remote notaries to develop a written set of procedures to follow to ensure compliance with the regular and new rules. Having a script or checklist to follow is good practice.
The notarization procedure under the Governor’s order is sometimes called Remote Ink-Signed Notarization (RIN). When RULONA goes into effect in Maryland on October 1, 2020, Remote Online Notarization (RON) will also be permitted here. With RON, documents may be eSigned and eNotarized under specified requirements.
There is pending federal legislation called the Securing and Enabling Commerce Using Remote and Electronic Notarization Act of 2020 (the SECURE Act) that would authorize and establish minimum standards for electronic and remote notarizations that occur in or affect interstate commerce. See Senate Bill 3533 and H.R.6364.
The foregoing does not relate to remote witnessing of wills, powers of attorney, and advance directives. Those instruments are subject to a different Executive Order by the Governor, No. 20-04-10-01 and are subject to a different procedure.
Subtitle 7 of Title 3 of the Real Property Article of the Maryland Code, the Maryland Uniform Real Property Electronic Recording Act, authorizes electronic recording of documents in Maryland.
The land records e-recording pilot program was established in October 2014 and started in Baltimore County in Spring 2015 to allow customers to electronically record, or e-record, land record documents. On January 21, 2016, the Court of Appeals expanded the Land Records E-Recording Programs to all circuit courts. By the end of 2019, the Land Record Program had been implemented in Baltimore City and all Maryland counties.
Maryland selected SimpliFile to be the state’s official e-recording platform. Through SimpliFile, customers can conveniently and securely e-record land record documents with an expedited turnaround time as well as reduced paper and mailing expenses. SimpliFile allows the recording office to receive, stamp, record, and return documents in a matter of minutes, a few hours, or a day or two. Recording fees and other related expenses are the same as with paper recordings and are paid directly through the SimpliFile system.
Because of the current COVID-19 emergency, the Chief Judge of the Maryland Court of Appeals issued an administrative order on March 18, 2020, expressly accepting electronic records and signatures consistent with UETA for filing in the land records with the Simplifile platform.
Not all Maryland recording offices accept all documents for e-recording although a number of jurisdictions have recently increased the types of documents accepted for e‑recording. For example, Baltimore City does not accept deeds, but Baltimore County now accepts indemnity deeds of trust. In many jurisdictions, amendments of existing documents may not be e-recorded.
The e-filer must be familiar with the indexing requirements of the applicable jurisdiction, including the order of documents to be recorded and any supporting documents that must accompany the documents to be recorded, such as the Land Instrument Intake Sheet. If a filing is deficient in some way, the e-filer receives a message from the recording office on what is missing and/or incorrect and is given an opportunity to correct the filing. Once a document is accepted, the e-filer receives an email alert and may download the recorded document showing the book and page references directly from SimpliFile.
While laws and practice are moving forward to permit electronic drafting, execution, acknowledgment, and recordation of documents, many commercial documents require notice from one party to another to be given by a type of mail (first class, certified or registered), commercial courier service (such as FedEx), or personal service (OMG! During the pandemic?).
It would be better for the documents to provide that notices may be sent and received by email. Generally, this is faster and better. But allowing or requiring that notices be sent by email does raise some questions, such as the following: If the email is sent after 5 p.m. or on a non-business day, is it deemed to be given on the following business day? What if the sender receives an automated notice that says the recipient is on vacation or the recipient’s inbox is full and cannot receive the email? What if the recipient’s computer treats the email as junk? Should there be a requirement that the subject line of the email contain language that is guaranteed to attract the recipient’s attention?
410-576-4146 • email@example.com
A version of this article titled “Remote transactions in Md. during the pandemic” was published online by The Daily Record on June 16, 2020.