Effective April 8, 2020 through May 6, 2020, the Governor has relaxed notary and witnessing requirements required by Michigan law in the wake of the COVID-19 pandemic. Executive Order 2020-41 was put in place to attempt minimize in-person interaction and facilitate remote work during the declared states of emergency and disaster. The Order waives strict compliance with the Uniform Electronic Transactions Act, MCL 450.831, et seq, and the Uniform Real Property Electronic Recording Act, MCL 565.841, et seq, specifically allowing an electronic signature for a transaction whenever a signature is required under Michigan Law, unless the law specifically requires a physical signature. The Order also waives strict compliance with the Michigan Law on Notarial Acts, MCL 55.261, et seq, to the extent the law requires a notary to be in the physical presence of an individual seeking the notary’s services or of any required witnesses. Importantly, a signature will not be denied legal effect or enforceability solely because it is in electronic form if completed in accordance with the Order.
Overview of Conditions Required by Executive Order 2020-41
In addition to other means available by law, the Order allows a notary to act (so long as they currently hold a valid notarial commission) utilizing two-way real-time audiovisual technology, with the following requirements:
- Two-way audiovisual technology must allow direct interaction (sight/sound) between the individual seeking the notary services, witnesses, and the notary at the time of notarization.
- Technology must be capable of creating an audio/visual recording of the complete notarial act, and the recording must be maintained for at least ten (10) years per MCL 55.286b(7-9).
- The individual seeking notary services, if not personally known, must present satisfactory evidence of identity to the notary during the video conference (not just at the beginning).
- The individual seeking the notary’s services must affirmatively represent either that the individual is physically situated in this state, or that the individual is physically located outside the state, and either: (1) the document is intended for filing/relates to a matter before a court, governmental entity, or other entity subject to the jurisdiction of this state; or (2) the document involves property located in this state or a transaction substantially connected to this state. If the person is physically located outside Michigan, the notary must have no actual knowledge that the individual’s act of making the statement/signing the document is prohibited by laws where the individual is physically located.
- The individual seeking notary services, any required witnesses, and the notary must be able to affix their signatures to the document in a manner that protects from tampering.
- The individual seeking notary services (or the individual’s designee) must transmit by fax, mail, or electronic means, a legible copy of the entire signed document directly to the notary on the same day it was signed.
- Once the notary receives the legible copy with all signature(s), the notary may notarize the document and return the signed, notarized document to the requesting individual.
- The date/time of the notarization shall be the date/time when the notary witnesses the signature via two-way real-time audiovisual technology.
Any requirement under law that an in-person witness attest to or acknowledge a document may also be satisfied by a two-way real-time audiovisual technology, with the following conditions (Note: some are different than the conditions listed above for notarial acts):
- Two-way real-time audiovisual technology must allow direct, contemporaneous interaction by sight and sound between the individual signing and the witness.
- The interaction between the signatory and the witness must be recorded and preserved by the signatory or the signatory’s designee for a period of at least three (3) years (unless state law requires a different period of retention).
- The signatory must affirmatively represent either that the signatory is physically situated in this state, or that the signatory is physically located outside the state and that either of the following apply: (1) the document is intended for filing with or relates to a matter before a court, governmental entity, public official, or other entity subject to the jurisdiction of this state; or (2) the document involves property located in the territorial jurisdiction of this state or a transaction substantially connected to this state.
- The signatory must affirmatively state during the interaction with the witnesses on the two-way real-time audiovisual technology what document they are executing.
- Each title page and signature page of the document being witnessed must be shown to the witness on the two-way real-time audiovisual technology in a manner clearly legible to the witness, and every page of the document must be numbered to reflect BOTH the page number of the document and the total number of pages of the document.
- Each act of signing the document must be captured sufficiently up close on the two-way real-time audiovisual technology for the witness to observe.
- The signatory (or their designate) must transmit, by fax, mail, or electronic means, a copy of the entire signed document directly to the witness within 24 hours of when it is executed.
- Within 24 hours of receipt, the witness must sign the transmitted copy of the document as a witness and return the signed copy of the document to the signatory (or their designate) by fax, mail, or electronic means.
The Order also generally provides the following:
- Governmental agencies and officials of the state are encouraged to use or permit the use of electronic records and electronic signatures for transaction of business, processing of applications, and recognition of the validity of legal instruments, and, when notarized signature is mandated by law, to use a remote electronic notary pursuant the Michigan Law on Notarial Acts, MCL 55.261, et seq. [Note: see below re: general requirements]
- Persons and entities engaged in transactions are encouraged to use electronic records and electronic signatures, and when a notarized signature is required by law, to use a remote electronic notary pursuant to the Michigan Law on Notarial Acts, MCL 55.261, et seq. [Note: see below re: general requirements]
- Absent an express prohibition in the document against signing in counterparts, any document signed under this order may be signed in counterparts.
- For any law in this state requiring an individual to appear personally before, or be in the presence of, either a notary at the time of notarization or a witness at the time of attestation or acknowledgment shall be satisfied if the individual, the witness and/or the notary are not in the physical presence of each other, but can communicate simultaneously by sight and sound via two-way real-time audiovisual technology at the time of notarization, attestation, or acknowledgment.
- Financial institutions and registers of deeds must NOT refuse to record a tangible copy of an electronic record on the ground that it does not bear the original signature of a person, witness, or notary, IF the notary before whom it was executed certifies that the tangible copy is an accurate copy of the electronic record.
Practice Suggestions and Practical Implications:
- Ensure you place page numbers and total number of pages contained in a document on each page of the document to be witnessed/notarized. Be as specific as possible in designating which signature page belongs to which document.
- Transmission of signed documents required to be completed on the same day or within 24 hours should be done electronically, where possible, and not via mail.
- Ensure that all transmitted copies of all pages of each document are legible.
- Because governmental agencies and officials (along with any others involved in transactions) are “encouraged to” use or permit electronic signature while the Order is in place, it will be critical that each notary and witness transaction completed pursuant to the Order be recorded and the recording kept for a period of at least 10 years. This recording should be retained with any original files in the normal course, so that if any question arises related to enforceability of a notary or witness signature, compliance with the Order can be proven and the appropriate files easily located. While many city and governmental offices are closed and have extremely limited access during this time, it is hopeful that financial institutions and registers of deeds will allow for a secure electronic method to transmit and/or record the document during the effective period of the Order. It is uncertain whether a register of deeds will accept this manner of signing for purposes of recording and it is advised to check with the respective register before proceeding with and relying on signatures notarized or witnessed consistent with of the Order. Certainly, after the effective period of the Order, it is uncertain how the conditions provided will be accepted or processed, if at all.
- Include language under the notary block which states the following: “notary certifies that the copy is an accurate copy of the electronic record”. This will assist with compliance with paragraph 10 of the Order as to financial institutions and registers of deeds.
- Include “notarized using electronic/remote technology” under the notary block.
- A notary acting by the terms of the Order must keep a journal of each transaction conducted by using the two-way real-time audiovisual technology. The journal should state the name and contact information for the individual signing the document, the date and time of the notarial act, the type of document being notarized, the total number of pages to the document, the identification documentation provided (with expiration date), and the program the notary utilized to conduct the notarial act (i.e. Zoom, FaceTime, etc). All individuals present during the video conference should also be noted in the journal entry. Anticipate the need for clients (or those involved in a transaction) to have access to the technology required to comply with the Order (a device capable of transmitting video and audio).
- When notarizing a document, be mindful of Michigan’s 2018 amendments to Michigan Law on Notarial Acts which allow electronic and remote notarizations with certain limitations and by certain approved systems. If you are wondering where to start with certain electronic and remote notarization vendors or systems, the State of Michigan Secretary of State has approved certain electronic and remote notarization vendors which include: E-Mortgage Law, Nexsys, Pavaso, NotaryCam, and Notarize. Prior to electronically or remotely notarizing a document per the 2018 amendments, the notary must have an application on file with the Department of State that designates which Secretary of State pre-approved vendor system the notary will use to conduct the electronic/remote notarial acts. If already a commissioned notary, the form is available here: Notary Request for Duplicate/Notice of Change. At this time, systems like DocuSign, PandaDoc, Zoho Sign, SignRequest, SignNow, RightSignature, etc, are not approved for use when completing an electronic or remote notarial act. General information on electronic and remote notarial acts under the 2018 amendments can be found here.
- While Executive Order 2020-41 loosens some requirements of Michigan law related to witnessing and notarizing documents which may be helpful in the business transactions or real estate world, the above conditions will likely prove to be challenging in the practice of estate planning. The conditions set forth in the Order are not likely manageable or accessible to many estate planning clients who do not have access to two-way audiovisual technology or to means of processing the electronic signature.
- Should the Legislature proceed with broadening the 2018 amendments to additional software to enable a notary to act electronically remotely, the fee charged for this service should be in compliance with MCL 55.285(7), i.e. $10, and any company offering notary services would be required to comply with this statute. To-date, most electronic notary companies appear to charge around $20-25 per notarial act, even if they are completing the notarial act remotely and not traveling to perform the notarial act.
- Be sure to check with the requirements of lenders and title insurance underwriters before proceeding with signatures in accordance with the Order to ensure compliance with any of their respective internal compliance guidelines.
- It is to be determined how this Order and the pandemic will impact notarial acts and witnessing documents in the future in our state. The Order expires on its own terms on May 6, 2020, and the methods of notarizing and witnessing documents described in the Order are only permitted through this date. The restrictions on close social contact are likely to last much longer. As practitioners, we can only hope that there will be a more permanent approved remote and electronic manner that is secure, efficient, and will allow equal access to services to allow business and life to carry on in the new normal.
Authored by: Jennifer Cupples