Bulletin: FL2018001

Date:
February 07, 2018
To:
All Florida Issuing Offices
RE:
UNDERWRITING - Electronic Signatures [Revised 2-20-18]

Dear Associates:

This Bulletin is to provide guidance and requirements for handling transactions involving Electronic Signatures (“eSignatures”). With the increased development of technology and use in real estate transaction, it is imperative certain safeguards and safety practices be employed to confirm the documents being insured are executed in conformity with national and state laws.      

LAWS ON ELECTRONIC SIGNATURE (eSignature)

Federal and state laws authorize and govern the use of eSignatures. The signing process is akin to electronic signatures on a signing pad in a store or bank. The two principal statutes governing electronic signatures are:

1. The Electronic Signatures in Global and National Commerce Act enacted into law in 2000 (“E-Sign”, 15 U.S.C. 96 §7001 et seq.); and,

2. The Uniform Electronic Transactions Act (“UETA”), a uniform act that has been adopted in various forms by 47 states plus the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Illinois, New York, and Washington have not adopted UETA but instead, have enacted state electronic signature laws and regulations that apply.  

  • Florida adopted the Uniform Electronic Transactions Act (“UETA”) which became effective July 2000 and is codified in Florida Statutes, Section 668.50 and the Electronic Signatures Act of 1996 found in Florida Statutes, Sections 668.001-.006.

E-Sign and UETA authorize and enable electronic signing but they do not require any person to use or to accept electronic signatures. Disclosures to the customer and the customer’s consent to sign or receive documents electronically are required by E-Sign and UETA. 

Definition of Electronic Signature

Electronic Signature is defined by Florida Law as “. . .  an electronic sound, symbol, or process attached to or logically associated with a record and executed or adopted by a person with the intent to sign the record.”  Fla. Stat. 668.50(2)(h).

Electronic Signatures are acceptable provided the parties to the transaction consent to this method of signing. This means the Buyer, Seller and Lender (if one) must consent to the use of eSignatures in order for the documents to be given legal effect.

For an eSignature to be valid and enforceable:

  • All parties must consent to work together electronically; 
  • All parties must have an exclusive way to sign and accept terms; and 
  • All parties must have access to the documents after signing.

Requirements Applicable to eSignatures, eNotarization and insuring eDocuments:

  • Issuing Offices must confirm in advance the county clerk or recorder is willing and able to receive and record instruments by electronic filing (“eRecording”). If the county does not perform eRecording, the form and manner of execution and manner of eNotarization must be pre-cleared before closing and insuring.   
  • Out-of-State Instruments: Issuing Offices must examine the signature page of all recordable instruments to confirm they are properly executed and notarized in accordance with Florida law before insuring a transaction or sending the instrument for recording regardless of where an instrument affecting real property is prepared or where such instrument is executed.     
  • Issuing Offices must obtain written consents (which may be electronic) from all parties to the transaction, including the seller, buyer/borrower and lender, for the use of electronic signatures, including the Note and Mortgage/Deed of Trust. This consent must be executed prior to the document being executed electronically. See sample consent attached. To evidence consent in the public record, include the following recital in the instrument upon recording:

“This instrument is valid and enforceable under state and federal electronic signature laws as all the parties to this instrument consented to do business and intended to sign electronically."  

  • The signatory must still be in the physical presence of the notary in order for the document to be relied upon in Florida; remote notarized documents cannot be accepted or relied upon in Florida.  
  • Issuing Offices must use a eSignature technology platform which does the following:  
    • Contains a digital certificate or audit trail of each signed document. The certification/attribution can be next to the signature or it can be attached to the executed documents. You should retain a copy of the digital certificate in your file.  Any proprietary information such as IP address or personally identifiable information may be redacted.  
    • Utilizes multi-factor advance user authentication combined with a number of identity and credential verification techniques, including user ID/password, knowledge-based authentication, smart cards, or personal identification (i.e. driver’s license or Social security I.D.) services. Any eSignature solution should have several authentication levels for determining that a document is signed by the person who claims to be signing it and not a forger. 
    • Utilizes a system that will prevent document tampering by ensuring signed documents are locked with tamper evident markers, as well as links of the signature to the instrument with the user authentication to avoid future signer repudiation; and 
    • Utilizes a secure storage and retrieval method that can be proven including high level of data security standards and privacy safeguards consistent with industry best practices. 
    • These requirements are typically met by using an eSignature platform.Platforms vary in sophistication from a security standpoint. Stewart has reviewed and approved the following Trusted Providers for online notarization:   
    • Pavaso (eSign & eNotary) 
    • DocuSign (eSignature) 
  • You should vet and verify any eSignature and eNotary technology they use to insure it meets your lender and your company’s requirements in accordance with ALTA Best Practices.   
  • In Florida, electronic notarizations must comply with all the requirements for paper notarization, except that the notary's signature and seal may be electronic. Thus, like paper notarizations, electronic notarizations require:  
  • Personal appearance of the individual before the notary; 
    • That the document be signed or acknowledged by the individual; 
    • A notarial certificate, executed by the notary; and  
    • The notary's signature, seal, and expiration date. The eNotary must be: (A) an employee of your office, or (B) if a third party eNotary, vetted and approved by your office. You must be satisfied that the eNotary is in compliance with all applicable state licensing, technological, regulatory and procedural requirements to perform eNotarization in Florida. 
    • Physical Seal Not Required: A seal is not required provided the eSignature contains all of the information which would be contained on a seal (full name, words "Notary Public of the State of Florida", and notary's commission number).  

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.

For on-line viewing of this and other bulletins, please log onto www.vuwriter.com.

THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER  AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.

References

Bulletins Replaced:
None
Related Bulletins:
SLS2017002 UNDERWRITING - Electronic Signatures and Electronic and Remote Notarization
Underwriting Manual:
None
Exceptions Manual:
None
Forms:
None