California looks poised to finally pass RON legislation

Digital closings could be coming to California, the country’s largest real estate market, within the decade. 

Gov. Gavin Newsom of California on Tuesday received a senate bill legalizing remote online notarizations (RON). He has until Oct. 14 to act on it. The senate bill, introduced by State Senator Anthony Portantino, would allow homebuyers, sellers and borrowers to close their home purchase or refinance transactions remotely.

“This is a huge deal,” Pat Kinsel, founder and CEO of Notarize, told HousingWire. “We’ve been working towards this goal for eight years. We’ve been really successful passing legislation out in 45 states, but we’ve been very focused on California for a long time.”

California is a massive real estate market, the largest in the country, but Kinsel said there’s more to it than just deal volume.

“It’s not just that it’s a big state. It’s really a center of innovation, including for real estate technology. It’s also a population center that’s really tech savvy.”

As amended, the bill provides that California notaries could begin to offer online notarization services beginning January 1, 2030 though stakeholders like Notarize hope it will be years earlier. The California secretary of state must complete a technology project needed to support RON before digital closings can be rolled out.

Notarize worked closely with both the Attorney General’s Office and the Secretary of State’s office to advance legislation in California. Notarize already operates in all 50 states but not for real estate matters.

California in particular takes consumer protection very seriously, setting a higher bar for identify verification and record retention. On that note, Notarize recently launched a product called Proof, a platform offering the “highest level of identity assurance in the industry,” according to the release

Last May, the Urban Institute held a panel discussion among experts including Kinsel, examining the geography of notaries. It found that California was one of the least equitable states in the country when it came to access to financial and government services. 

Hence, the bill isn’t only about advancing digital transformation in the real estate industry but is also a way to improve access to all types of government financial services for Californians, said Kinsel. 

Virginia was the first state to approve RON legislature, roughly a decade ago, but it took several years for other states to begin following suit. With the pandemic and changes in consumer preference, more states have begun passing RON legislation. Massachusetts’s Gov. Maura Healey signed legislation legalizing remote online notarizations (RON) last March. It takes effect on Jan. 1, 2023.

Aside from California, only five states have yet to pass legislation fully authorizing remote online notarizations: Connecticut, Georgia, Mississippi, South Carolina and South Dakota.

Due to the rise in demand for RON services, the Mortgage Industry Standard Maintenance Organization (MISMO) launched its RON compliance certification program in April 2020. Notarize is currently among the few companies that has received RON compliance certification, including eNotaryLog, Black Knight, Snapdocs, Nexys, DocuTech, Pro Notary and Pavaso.