Remote transactions in Md. during the pandemic

levin-ed-col-sigBecause 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”), found at Maryland Code, Commercial Law Article (“CL”) §21-101 et seq. UETA is similar to the federal Electronic Signature in Global and National Commerce Act, 15 UCCA § 7001 et seq. (“E-SIGN”).

mohan-lisa-col-sigBecause of the consistency 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” includes 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. Electronic signatures may include signatures in emails, PDFs, and faxes, as well signatures through commercial firms, such as DocuSign and Adobe Sign.

Provisions in the Corporations and Associations (“C&A”) and Real Property (“RP”) Articles also authorize electronic signatures.  C&A §1‑101(z) and RP §3-702(c).

Agreement to use

UETA applies only to transactions between parties that have agreed to conduct transactions by electronic means. Under CL §21-104(b)(3) agreement to eSign a “standard form contract” must be conspicuously displayed and separately consented to.

For other documents the agreement of the parties can be implicit and can be based on the circumstances and the conduct of the parties. If all parties eSign a contract, they have obviously consented to the use of electronic signatures. A provision in a contract that the parties have agreed to accept electronic signatures is useful if one party eSigns but another does not.

Remote notarizations

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 here until Oct. 1, 2020.

The good news is that Gov. Larry Hogan issued Executive Order No. 20-03-30-04 on March 30, 2020, which permits remote notarizations during the COVID-19 crisis. The order, together with guidelines of the Maryland Secretary of State, which were published in the Maryland Register on April 24, waives the in-person requirement for notaries and permits 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. Their session must be recorded, and the notary must retain the recording.

Remote recordings

RP Title 3, Subtitle 7, the Maryland Uniform Real Property Electronic Recording Act, authorizes electronic recording of documents in Maryland.

After starting as a pilot program in 2014, the Land Records E-Recording Programs were implemented in Baltimore city and all Maryland counties by the end of 2019 to allow customers to electronically record, or e-record, land record documents.

Maryland selected SimpliFile to be the e-recording platform in this state.  Through SimpliFile, customers can conveniently and securely e-record land record documents, with an expedited turnaround time and with 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.

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 County now accepts indemnity deeds of trust. In many places, 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 given an opportunity to correct the filing. Once a document is accepted, the e-filer receives an e‑mail alert and may download the recorded document showing the book and page references directly from SimpliFile.

Edward J. Levin is a member of the real estate practice group at Gordon Feinblatt LLC in Baltimore. Lisa B. Mohan is a legal assistant at the firm.