Existing law establishes various county offices, including the office of recorder. Existing law requires the recorder to, among other things, accept for recordation any instrument, paper, or notice that is authorized or required to be recorded, as specified. Existing law authorizes a notary public to apply for registration with the Secretary of State to perform online notarization according to specified requirements.

This bill would authorize a disinterested custodian, as defined, to certify that a tangible copy of an electronic record is a completed and accurate reproduction of the electronic record. The bill would require a recorder to accept for recording a tangible copy of an electronic record that has been so certified by a notary public if specified requirements are met. The bill would state that a tangible copy of an electronic record imparts notice of its contents, as specified, notwithstanding any failure of the person making the certification to qualify as a disinterested custodian. By imposing these requirements, and by expanding the crime of perjury, this bill would impose state-mandated local programs.

Existing law provides that any instrument affecting the title to real property, one year after the same has been copied into the proper book of record, that is kept in the office of any county recorder, provides notice of its contents to specified individuals, notwithstanding any defect, omission, or informality in the execution of the instrument or in the certificate of acknowledgment, or absence of that certificate.

This bill would instead provide that an above-described instrument provides notice of its contents 90 days after it has been copied into the proper book of record.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for specified reasons.

Existing law establishes various county offices, including the office of recorder. Existing law requires the recorder to, among other things, accept for recordation any instrument, paper, or notice that is authorized or required to be recorded, as specified. Existing law authorizes a notary public to apply for registration with the Secretary of State to perform online notarization according to specified requirements.

This bill would authorize a disinterested custodian, as defined, to certify that a tangible copy of an electronic record is a completed and accurate reproduction of the electronic record. The bill would require a recorder to accept for recording a tangible copy of an electronic record that has been so certified by a notary public if specified requirements are met. The bill would state that a tangible copy of an electronic record imparts notice of its contents, as specified, notwithstanding any failure of the person making the certification to qualify as a disinterested custodian. By imposing these requirements, and by expanding the crime of perjury, this bill would impose state-mandated local programs.

Existing law provides that any instrument affecting the title to real property, one year after the same has been copied into the proper book of record, that is kept in the office of any county recorder, provides notice of its contents to specified individuals, notwithstanding any defect, omission, or informality in the execution of the instrument or in the certificate of acknowledgment, or absence of that certificate.

This bill would instead provide that an above-described instrument provides notice of its contents 90 days after it has been copied into the proper book of record.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for specified reasons.

Existing law establishes various county offices, including the office of recorder. Existing law requires the recorder to, among other things, accept for recordation any instrument, paper, or notice that is authorized or required to be recorded, as specified. Existing law authorizes a notary public to apply for registration with the Secretary of State to perform online notarization according to specified requirements.

This bill would authorize a notary public disinterested custodian, as defined, to certify that a tangible copy of an electronic record is an a completed and accurate reproduction of the electronic record. The bill would require a recorder to accept for recording a tangible copy of an electronic record that has been so certified by a notary public if specified requirements are met. The bill would state that a tangible copy of an electronic record imparts notice of its contents, as specified, notwithstanding any failure of the person making the certification to qualify as a disinterested custodian. By imposing these requirements, and by expanding the crime of perjury, this bill would impose state-mandated local programs.

Existing law provides that any instrument affecting the title to real property, one year after the same has been copied into the proper book of record, that is kept in the office of any county recorder, provides notice of its contents to specified individuals, notwithstanding any defect, omission, or informality in the execution of the instrument or in the certificate of acknowledgment, or absence of that certificate.

This bill would instead provide that an above-described instrument provides notice of its contents 90 days after it has been copied into the proper book of record.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for specified reasons.

Existing law establishes various county offices, including the office of recorder. Existing law requires the recorder to, among other things, accept for recordation any instrument, paper, or notice that is authorized or required to be recorded, as specified. Existing law authorizes a notary public to apply for registration with the Secretary of State to perform online notarization according to specified requirements.

This bill would authorize a notary public to certify that a tangible copy of an electronic record is an accurate reproduction of the electronic record. The bill would require a recorder to accept for recording a tangible copy of an electronic record that has been so certified by a notary public if specified requirements are met. By imposing these requirements, and by expanding the crime of perjury, this bill would impose state-mandated local programs.

Existing law provides that any instrument affecting the title to real property, one year after the same has been copied into the proper book of record, that is kept in the office of any county recorder, provides notice of its contents to specified individuals, notwithstanding any defect, omission, or informality in the execution of the instrument or in the certificate of acknowledgment, or absence of that certificate.

This bill would instead provide that an above-described instrument provides notice of its contents immediately 90 days after it has been copied into the proper book of record.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for specified reasons.

Existing law establishes various county offices, including the office of recorder. Existing law requires the recorder to, among other things, accept for recordation any instrument, paper, or notice that is authorized or required to be recorded, as specified. Existing law authorizes a notary public to apply for registration with the Secretary of State to perform online notarization according to specified requirements.

This bill would authorize a notary public to certify that a tangible copy of an electronic record is an accurate reproduction of the electronic record. The bill would require a recorder to accept for recording a tangible copy of an electronic record that has been so certified by a notary public if specified requirements are met. By imposing these requirements, and by expanding the crime of perjury, this bill would impose state-mandated local programs.

Existing law provides that any instrument affecting the title to real property, one year after the same has been copied into the proper book of record, that is kept in the office of any county recorder, provides notice of its contents to specified individuals, notwithstanding any defect, omission, or informality in the execution of the instrument or in the certificate of acknowledgment, or absence of that certificate.

This bill would instead provide that an above-described instrument provides notice of its contents immediately after it has been copied into the proper book of record.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for specified reasons.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 2004

Author:(Petrie-Norris)

As Amended Ver:June 20, 2024

Majority vote

SUMMARY

Makes various changes to the process for recording documents with county recorders to better facilitate the use of remote online notarization in California, which was authorized in 2023.

Major Provisions

1. Provides that for any instrument affecting the title to real property, 90-days after the same has been copied into the proper book of record, kept in the office of any county recorder, imparts notice of its contents to subsequent purchasers and encumbrancers, notwithstanding any defect, omission, or informality in the execution of the instrument, or in the certificate of acknowledgment thereof, or the absence of any such certificate.
2. Permits a disinterested custodian of an electronic record to certify that a tangible copy of an electronic record is an accurate reproduction of the electronic record.
3. Requires the certification required by 2), above, to be subscribed and sworn to, or affirmed, by the disinterested custodian before a notary public and accompanied by a jurat attached thereto, as specified.
4. Specifies the form of the certification described in 2), above, and requires a disinterested custodian of an electronic record to swear under the penalty of perjury the following, "I hereby certify that the attached instrument entitled document title, if applicable, dated document date, and containing page count pages is an accurate reproduction of an electronic record printed by me or under my supervision. At the time of printing, I had access to the electronic record displaying intact tamper-evident security procedures. No security procedures used present on the electronic record indicated any changes or errors in an electronic signature or other information in the electronic record after the completion of the electronic record's creation, execution, or notarization."
5. Permits a notary public to decline a request to print and certify a tangible reproduction of an electronic record.
6. Requires a county recorder to accept for recording a tangible copy of an electronic record bearing electronic signatures and containing a certificate in the form required by 4), above, as a certified copy of an original document provided that the electronic record is otherwise an instrument or notice that is authorized or required to be recorded and the tangible copy satisfies the requirements of existing law related to remote online notarizations.
7. Defines "disinterested custodian" as a person who has access to an electronic record displaying intact tamper-evident security procedures and who is not the grantee, beneficiary, or otherwise a person who directly benefits from the electronic record.

Senate Amendments

1. Replace references to notary public with disinterested custodian.
2. Define disinterested custodian.
3. Revise the sworn statement that a disinterested custodian of an electronic record must sign.

COMMENTS

In 2023, the Legislature adopted SB 696 (Portantino) Chapter 291, Statutes of 2023, which approved the use of remote online notarizations in California after years of Legislative wrangling over the topic. Among the benefits of online notarization are fewer errors, as computer software is frequently more adept at catching missing or erroneous information than humans, and the ability for Californians in living rural areas to increase their access to notarial services. Reflecting these realities, this bill makes minor updates to SB 696 to ensure that online notarization can be efficiently deployed in California.

In order to prevent fraud and to ensure that the person signing important documents is who they claim to be, certain documents must be notarized. In order for a document to be notarized, a notary public must verify the identity of a signatory then affix the notarial seal to the document. Around the onset of the pandemic, and required social distancing, a legislative push began to enact a set of rules permitting and governing remote online notarization in California. That effort culminated in the passage of SB 696 in 2023. That bill established a broad framework to ensure that documents notarized remotely were secure, identification of signatories would be accurate, data would be properly retained, and a regulatory process for the licensure of notaries certified to perform remote notarizations by the Secretary of State.

Recognizing the complexities of online notarizations, SB 696 required the Secretary of State to complete the development of regulations regarding the process. That rulemaking may take until 2030. However, the text of SB 696 does permit the use of online notarization as soon as the rulemaking is complete, therefore any deficiencies in the law related to online notarization should be address as quickly as possible to ensure the smooth rollout of the technology in California.

Under existing law, a document effecting property is not entitled to be filed if it contains errors. Nonetheless, imperfect property-related documents are accepted by government officials all the time. For example, it is not entirely uncommon for a person purchasing a home, as well as the notary overseeing the signing of sales documents, to erroneously omit a signature in the lengthy series of documents that must be signed at closing. While many of these mistakes can be identified and remedied, sometimes they are not. Because these errors do not constitute fraud, California law deems such errors "cured" one year after the document was copied into government records.

One of the principal benefits of utilizing online notarial tools is the improved accuracy of the documents. For example, because a computer system is tracking the places in which the document is to be signed, the likelihood that a signature or initial is erroneously omitted from a document decreases dramatically. Accordingly, this measure will now shorten the sure period to 90 days.

One of the leading arguments in favor of remote online notarization would be the increased opportunities for Californians living in rural areas, without a significant supply of notaries, to increase their access to notarial services. However, proponents of this bill now note that 13 of California's 58 counties, ironically many of the very rural counties that might have received the most benefit of online notarial services, do not accept electronically filed documents. Seeking to ensure that consumers in these counties that utilize remote notarial services are not left unable to file their notarized documents, this bill provides for a process whereby the electronic document can be reprinted and accompanied by an attestation from a notary that the document is a valid reprint of the original electronic document.

Recognizing that, in some cases, the original notary may not be local, this bill creates a new position of a "disinterested custodian" and authorizes that person to perform the certification. In practice, this would mean that a party would have to take their remotely notarized electronic version to a local disinterested custodian who would then be able to print out the document and attest to its validity. Although this two-step process appears to significantly undermine the convenience of online notarization, similar processes are in place in 35 other states that permit online notarization.

According to the Author

This bill would enact two changes aimed at improving the ability to record remotely notarized documents in California. First, it would allow notaries public to certify paper copies of electronic documents as accurate representations entitled to be recorded in public records. The proposed certification process, widely used in other states, is simple: a notary reviews an electronic document, ensures that it is still locked with a tamper-evident seal, prints the document, ensures that the document printed correctly, and completes the simple certification form. Certification would also be permissive, meaning that notaries would be perfectly within their rights to decline to certify should they so choose.

Separately, the bill would ensure that valid documents containing technical defects or omissions in an acknowledgment form provide faster constructive notice of an instrument when recorded in public records, as opposed to the one-year period in place under current law.

These provisions will enhance access to and increase the usability of remote online notarization across the state, as well as protect individuals from unintended difficulties should documents contain unintended technical notarial defects. These provisions are commonly contained in other state's recording statutes; 35 states allow notaries to certify paper copies of electronic documents for recording purposes, while at least 17 states provide that documents containing technical defects or omissions provide immediate constructive notice upon recording.

Arguments in Support

A coalition of supporters, including but not limited to the California Land Title Association, the National Notary Association, and the California Association of Realtors write in support of this bill:

AB 2004 would modernize California's recorded document laws by authorizing California notaries to certify paper copies of electronic documents – including documents notarized via remote online notarization (RON) – so that they may be recorded in California's real property records and, separately, shorten the time at which recorded documents provide constructive notice if they contain a technical error.

Current law does not provide a mechanism to certify paper copies of electronic documents for recording purposes, leaving 22% of California counties unable to participate in RON. California law supports the use of electronic documents, electronic signatures, and electronic notarization. However, not all county recorder offices are equipped to accept electronic documents for recording purposes.

AB 2004 would resolve this by putting in place a simple certification process, in which a notary reviews an electronic document, ensures that it is still locked with a tamper-evident seal, prints the document, ensures that the document printed correctly, and completes the simple certification form. Certification would also be permissive, meaning that notaries would be perfectly within their rights to decline to certify should they so choose.

Arguments in Opposition

No opposition to the amended bill.

FISCAL COMMENTS

According to the Senate Appropriations analysis:

1. Likely no cost to county recorders to accept for recording a tangible copy of an electronic record certified by the process established by this bill. County recorders charge fees for their recording services, which would likely offset any minor costs incurred under this bill.
2. Costs (General Fund) to the Secretary of State (SOS), possibly in the low hundreds of thousands of dollars. SOS estimates one-time staffing costs of approximately $190,000 to update its Notary Public Handbook, training materials, website, and regulations, and provide education to existing notaries and education vendors.

VOTES:

ASM JUDICIARY: 10-0-2

YES: Kalra, Dixon, Bauer-Kahan, Bryan, Connolly, Maienschein, McKinnor, Pacheco, Reyes, Sanchez

ABS, ABST OR NV: Haney, Waldron

ASM APPROPRIATIONS: 15-0-0

YES: Wicks, Sanchez, Arambula, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Grayson, Haney, Hart, Jim Patterson, Pellerin, Ta, Villapudua

ASSEMBLY FLOOR: 73-0-7

YES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Dixon, Essayli, Flora, Mike Fong, Vince Fong, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

ABS, ABST OR NV: Cervantes, Megan Dahle, Friedman, Gabriel, Holden, Mathis, Luz Rivas

UPDATED

VERSION: June 20, 2024

CONSULTANT: Nicholas Liedtke / JUD. / (916) 319-2334 FN: 0004447

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 2004

Author:(Petrie-Norris)

As Amended Ver:June 20, 2024

Majority vote

SUMMARY

Makes various changes to the process for recording documents with county recorders to better facilitate the use of remote online notarization in California, which was authorized in 2023.

Major Provisions

1. Provides that for any instrument affecting the title to real property, 90-days after the same has been copied into the proper book of record, kept in the office of any county recorder, imparts notice of its contents to subsequent purchasers and encumbrancers, notwithstanding any defect, omission, or informality in the execution of the instrument, or in the certificate of acknowledgment thereof, or the absence of any such certificate.
2. Permits a disinterested custodian of an electronic record to certify that a tangible copy of an electronic record is an accurate reproduction of the electronic record.
3. Requires the certification required by 2), above, to be subscribed and sworn to, or affirmed, by the disinterested custodian before a notary public and accompanied by a jurat attached thereto, as specified.
4. Specifies the form of the certification described in 2), above, and requires a disinterested custodian of an electronic record to swear under the penalty of perjury the following, "I hereby certify that the attached instrument entitled document title, if applicable, dated document date, and containing page count pages is an accurate reproduction of an electronic record printed by me or under my supervision. At the time of printing, I had access to the electronic record displaying intact tamper-evident security procedures. No security procedures used present on the electronic record indicated any changes or errors in an electronic signature or other information in the electronic record after the completion of the electronic record's creation, execution, or notarization."
5. Permits a notary public to decline a request to print and certify a tangible reproduction of an electronic record.
6. Requires a county recorder to accept for recording a tangible copy of an electronic record bearing electronic signatures and containing a certificate in the form required by 4), above, as a certified copy of an original document provided that the electronic record is otherwise an instrument or notice that is authorized or required to be recorded and the tangible copy satisfies the requirements of existing law related to remote online notarizations.
7. Defines "disinterested custodian" as a person who has access to an electronic record displaying intact tamper-evident security procedures and who is not the grantee, beneficiary, or otherwise a person who directly benefits from the electronic record.

Senate Amendments

1. Replace references to notary public with disinterested custodian.
2. Define disinterested custodian.
3. Revise the sworn statement that a disinterested custodian of an electronic record must sign.

COMMENTS

In 2023, the Legislature adopted SB 696 (Portantino) Chapter 291, Statutes of 2023, which approved the use of remote online notarizations in California after years of Legislative wrangling over the topic. Among the benefits of online notarization are fewer errors, as computer software is frequently more adept at catching missing or erroneous information than humans, and the ability for Californians in living rural areas to increase their access to notarial services. Reflecting these realities, this bill makes minor updates to SB 696 to ensure that online notarization can be efficiently deployed in California.

In order to prevent fraud and to ensure that the person signing important documents is who they claim to be, certain documents must be notarized. In order for a document to be notarized, a notary public must verify the identity of a signatory then affix the notarial seal to the document. Around the onset of the pandemic, and required social distancing, a legislative push began to enact a set of rules permitting and governing remote online notarization in California. That effort culminated in the passage of SB 696 in 2023. That bill established a broad framework to ensure that documents notarized remotely were secure, identification of signatories would be accurate, data would be properly retained, and a regulatory process for the licensure of notaries certified to perform remote notarizations by the Secretary of State.

Recognizing the complexities of online notarizations, SB 696 required the Secretary of State to complete the development of regulations regarding the process. That rulemaking may take until 2030. However, the text of SB 696 does permit the use of online notarization as soon as the rulemaking is complete, therefore any deficiencies in the law related to online notarization should be address as quickly as possible to ensure the smooth rollout of the technology in California.

Under existing law, a document effecting property is not entitled to be filed if it contains errors. Nonetheless, imperfect property-related documents are accepted by government officials all the time. For example, it is not entirely uncommon for a person purchasing a home, as well as the notary overseeing the signing of sales documents, to erroneously omit a signature in the lengthy series of documents that must be signed at closing. While many of these mistakes can be identified and remedied, sometimes they are not. Because these errors do not constitute fraud, California law deems such errors "cured" one year after the document was copied into government records.

One of the principal benefits of utilizing online notarial tools is the improved accuracy of the documents. For example, because a computer system is tracking the places in which the document is to be signed, the likelihood that a signature or initial is erroneously omitted from a document decreases dramatically. Accordingly, this measure will now shorten the sure period to 90 days.

One of the leading arguments in favor of remote online notarization would be the increased opportunities for Californians living in rural areas, without a significant supply of notaries, to increase their access to notarial services. However, proponents of this bill now note that 13 of California's 58 counties, ironically many of the very rural counties that might have received the most benefit of online notarial services, do not accept electronically filed documents. Seeking to ensure that consumers in these counties that utilize remote notarial services are not left unable to file their notarized documents, this bill provides for a process whereby the electronic document can be reprinted and accompanied by an attestation from a notary that the document is a valid reprint of the original electronic document.

Recognizing that, in some cases, the original notary may not be local, this bill creates a new position of a "disinterested custodian" and authorizes that person to perform the certification. In practice, this would mean that a party would have to take their remotely notarized electronic version to a local disinterested custodian who would then be able to print out the document and attest to its validity. Although this two-step process appears to significantly undermine the convenience of online notarization, similar processes are in place in 35 other states that permit online notarization.

According to the Author

This bill would enact two changes aimed at improving the ability to record remotely notarized documents in California. First, it would allow notaries public to certify paper copies of electronic documents as accurate representations entitled to be recorded in public records. The proposed certification process, widely used in other states, is simple: a notary reviews an electronic document, ensures that it is still locked with a tamper-evident seal, prints the document, ensures that the document printed correctly, and completes the simple certification form. Certification would also be permissive, meaning that notaries would be perfectly within their rights to decline to certify should they so choose.

Separately, the bill would ensure that valid documents containing technical defects or omissions in an acknowledgment form provide faster constructive notice of an instrument when recorded in public records, as opposed to the one-year period in place under current law.

These provisions will enhance access to and increase the usability of remote online notarization across the state, as well as protect individuals from unintended difficulties should documents contain unintended technical notarial defects. These provisions are commonly contained in other state's recording statutes; 35 states allow notaries to certify paper copies of electronic documents for recording purposes, while at least 17 states provide that documents containing technical defects or omissions provide immediate constructive notice upon recording.

Arguments in Support

A coalition of supporters, including but not limited to the California Land Title Association, the National Notary Association, and the California Association of Realtors write in support of this bill:

AB 2004 would modernize California's recorded document laws by authorizing California notaries to certify paper copies of electronic documents – including documents notarized via remote online notarization (RON) – so that they may be recorded in California's real property records and, separately, shorten the time at which recorded documents provide constructive notice if they contain a technical error.

Current law does not provide a mechanism to certify paper copies of electronic documents for recording purposes, leaving 22% of California counties unable to participate in RON. California law supports the use of electronic documents, electronic signatures, and electronic notarization. However, not all county recorder offices are equipped to accept electronic documents for recording purposes.

AB 2004 would resolve this by putting in place a simple certification process, in which a notary reviews an electronic document, ensures that it is still locked with a tamper-evident seal, prints the document, ensures that the document printed correctly, and completes the simple certification form. Certification would also be permissive, meaning that notaries would be perfectly within their rights to decline to certify should they so choose.

Arguments in Opposition

As noted, the California League of Independent Notaries is in opposition to the bill, unless amendments are taken to provide notaries with greater legal certainty when verifying paper copies of electronic notarial acts. They write:

Notaries are entrusted with important responsibilities that directly impact legal transactions and documentation. However, without the designation of being an official duty under Section 8205, the proposed certification would not be protected by a notary's bond or errors or omissions insurance. This exposes notaries to undue legal risks that could have severe consequences for their livelihoods.

In its current form, AB 2004 places notaries under felony liability with no protections of guidance. This not only undermines the integrity of notarial acts but also poses significant risk to the public. Therefore, we urge you to amend the bill to include adequate protections for notaries, clear guidelines for the certification process, and a defined fee structure.

FISCAL COMMENTS

According to the Senate Appropriations analysis:

1. Likely no cost to county recorders to accept for recording a tangible copy of an electronic record certified by the process established by this bill. County recorders charge fees for their recording services, which would likely offset any minor costs incurred under this bill.
2. Costs (General Fund) to the Secretary of State (SOS), possibly in the low hundreds of thousands of dollars. SOS estimates one-time staffing costs of approximately $190,000 to update its Notary Public Handbook, training materials, website, and regulations, and provide education to existing notaries and education vendors.

VOTES:

ASM JUDICIARY: 10-0-2

YES: Kalra, Dixon, Bauer-Kahan, Bryan, Connolly, Maienschein, McKinnor, Pacheco, Reyes, Sanchez

ABS, ABST OR NV: Haney, Waldron

ASM APPROPRIATIONS: 15-0-0

YES: Wicks, Sanchez, Arambula, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Grayson, Haney, Hart, Jim Patterson, Pellerin, Ta, Villapudua

ASSEMBLY FLOOR: 73-0-7

YES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Dixon, Essayli, Flora, Mike Fong, Vince Fong, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

ABS, ABST OR NV: Cervantes, Megan Dahle, Friedman, Gabriel, Holden, Mathis, Luz Rivas

UPDATED

VERSION: June 20, 2024

CONSULTANT: Nicholas Liedtke / JUD. / (916) 319-2334 FN: 0004447

 THIRD READING  

Bill No: AB 2004

Author: Petrie-Norris (D)

Amended: 6/20/24 in Senate

Vote: 21

SENATE JUDICIARY COMMITTEE: 10-0, 6/18/24

AYES: Umberg, Wilk, Allen, Ashby, Caballero, Durazo, Niello, Roth, Stern, Wahab

NO VOTE RECORDED: Laird

SENATE LOCAL GOVERNMENT COMMITTEE: 7-0, 7/3/24

AYES: Durazo, Seyarto, Dahle, Glazer, Skinner, Wahab, Wiener

SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/15/24

AYES: Caballero, Jones, Ashby, Becker, Bradford, Seyarto, Wahab

ASSEMBLY FLOOR: 73-0, 5/21/24 - See last page for vote

SUBJECT: County recorder: recordation of documents

SOURCE: California Land Title Association

DIGEST:

This bill shortens the window before a title document that was recorded despite having technical defects can provide notice of its content to subsequent purchasers or encumbrancers, from one year to 90 days; and establishes a procedure by which a tangible copy of an electronic record can be certified for purposes of recordation in a county that does not accept electronic original documents.

ANALYSIS:

Existing law:

1. Provides that an estate in real property, other than an estate at will or for a term not exceeding one year, can be transferred only by operation of law, or by an instrument in writing, subscribed by the party disposing of the property, or by their agent. (Civ. Code, § 1091.)
2. Provides that every grant of an estate in real property is conclusive against the grantor, also against every one subsequently claiming under the grantor, except a purchaser or incumbrancer who in good faith and for a valuable consideration acquires title or lien by an instrument that is first duly recorded. (Civ. Code, § 1107.)
3. Provides that an instrument that may be recorded must be recorded by the County Recorder of the county in which the real property affected by the instrument is situated. (Civ. Code, § 1169.)
4. Provides that an instrument is deemed to be recorded when, being duly acknowledged or proved and certified, it is deposited in the Recorder’s office, with the proper officer, for record. (Civ. Code, § 1170.)
5. Authorizes a notary public or other specified officer to take an acknowledgement of an instrument provided that the officer taking the acknowledgement has satisfactory evidence that the person making the acknowledgement is the individual who is described in and who executed the instrument, as specified. (Civ. Code, §§ 1181, 1185.)
6. Provides that every conveyance of real property or an estate for years therein acknowledged or proved and certified and recorded as prescribed by law from the time it is filed with the recorder for record is constructive notice of the contents thereof to subsequent purchasers and mortgagers; and a certified copy of such a recorded conveyance may be recorded in any other county and when so recorded the record thereof shall have the same force and effect as though it was of the original conveyance and where the original conveyance has been recorded in any county wherein the property therein is not situated a certified copy of the recorded conveyance may be recorded in the county where such property is situated with the same force and effect as if the conveyance has been recorded in that county. (Civ. Code, § 1213.)
7. Provides that an instrument affecting the title to real property, one year after the same has been copied into the proper book of record, kept in the office of any county recorder, imparts notice of its contents to subsequent purchasers and encumbrancers, notwithstanding any defect, omission, or informality in the execution of the instrument, or in the certificate or acknowledgement thereof, or in the absence of any such certificate.
   1. Duly certified copies of the record of any such instrument may be read in evidence with like effect as copies of an instrument duly acknowledged and recorded, provided that, when such copying in the proper book of record occurred within five years prior to the trial of the action, it is first shown that the original instrument was genuine. (Civ. Code, § 1207.)
8. Establishes, within each county, the county recorder, who shall, upon the payment of proper fees and taxes, accept for recordation any instrument, paper, or notice that is authorized or required by statute, or court order to be recorded, or authorized or required to be recorded by a local ordinance that relates to the recordation of any instrument, paper, or notice that relates to real property.
   1. The county recorder shall not refuse to record any instrument, paper, or notice that is authorized or required by statute, court order, or local ordinance that relates to the recordation of any instrument, paper, or notice that relates to real property to be recorded on the basis of its lack of legal sufficiency.
9. Each instrument, paper, or notice shall contain an original signature or signature, except as otherwise provided by law, or be a certified copy of the original. (Gov. Code, § 27201.)
10. Provides that it is the duty of a notary public, when requested:
    1. For a notary public employed by a financial institution, to demand acceptance and payment in specified forms of currency, as provided.
    2. To take the acknowledgement or proof of advance health care directives, powers of attorney, mortgages, deeds, grants, transfers, and other instruments of writing executed by any person, and to give a certificate of that proof or acknowledgement, endorsed or attached to the instrument; a notary public may not accept any acknowledgement or proof of any instrument that is incomplete. The certificate shall be signed by the notary public in their own handwriting.
    3. To take depositions and affidavits, and administer oaths and affirmations, in all matters incident to the duties of the office, or to be used before any court, judge, officer, or board; any deposition, affidavit, or affirmation shall be signed by the notary public in their own handwriting.
    4. To certify copies of powers of attorney under Probate Code section 4307. The certification shall be signed by the notary public in their own handwriting.
    5. To furnish certified copies of their journal or respond to written requests from the Secretary of State’s office, as specified. (Gov. Code, § 8205.)
11. Defines the following relevant terms:
    1. “Electronic record” means a record created, generated, sent, communicated, received, or stored by electronic means.
    2. “Electronic signature” means an electronic sound, symbol, or process attached to or logically associated with an electronic record and executed or adopted by a person with the intent to sign the electronic record, including a “digital signature,” as defined. (Civ. Code, § 1633.2.)

This bill:

1. Reduces the time frame after which an instrument affecting the title to real property that has been recorded imparts notice of its contents to subsequent purchasers and encumbrancers, notwithstanding any defect, omission, or informality in the execution of the instrument, or in the certificate of acknowledgement, or in the absence of any such certificate, from one year to 90 days.
2. Authorizes a disinterested custodian of an electronic record to certify that a tangible copy of the record is a complete and accurate reproduction of the electronic record, provided that the certification is subscribed and sworn to, or affirmed by, before a notary public and accompanied by a jurat, as specified.
3. Provides the form in which the certification in 2) shall be completed.
4. Provides that a certification made by a disinterested custodian pursuant to 2) is separate and distinct from a certified copy issued by a recorder for purposes of Evidence Code section 1530 and 1531.
5. Defines “disinterested custodian” as a person who as access to an electronic record displaying intact tamper-evident security procedures and who is not the grantee or beneficiary of, or otherwise a person who directly benefits from, the electronic record.

Comments

Under current law, a county recorder is authorized to accept for recordation either a document that contains original signatures, or a “certified copy” of the original.^[1] In counties that accept electronic documents for recordation, this requirement does not pose a problem: the recorder accepts the electronic original document digitally, and the effect is the same as if the document were a tangible original.

According to the author, however, not all counties are currently capable of accepting electronic documents for recordation. This means the only option for a person with an electronic original document that needs to be recorded is to submit a certified copy of the original—except there is currently no statutory provision for the creation of a certified tangible copy of an electronic document relating to real property.

This bill is intended to provide a mechanism by which an electronic document can be converted into a tangible paper copy that can be recorded, thereby providing notice of the contents of the document. Under the bill, a disinterested third party—i.e., a person who does not directly benefit from the record being certified—certifies, under penalty of perjury, that the printed document is a correct copy of the electronic record to the best of their knowledge. This certification must be sworn to before notary public and accompanied by a jurat.

Additionally, this bill shortens the period of time before which a recorded document that contains errors, such as omitting signatures, can provide notice of its contents to subsequent purchasers and encumbrancers, from one year to 90 days.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

According to the Senate Appropriations Committee, the fiscal impact of the bill is as follows:

• Likely no cost to county recorders to accept for recording a tangible copy of an electronic record certified by the process established by this bill. County recorders charge fees for their recording services, which would likely offset any minor costs incurred under this bill.
• Costs (General Fund) to the Secretary of State (SOS), possibly in the low hundreds of thousands of dollars. SOS estimates one-time staffing costs of approximately $190,000 to update its Notary Public Handbook, training materials, website, and regulations, and provide education to existing notaries and education vendors.

SUPPORT: (Verified 8/14/24)

California Land Title Association (source)

California Association of Realtors
California Bankers Association
California Credit Union League
California Escrow Association
California Mortgage Bankers Association
First American Financial Corporation
National Notary Association
Proof, Inc.
Zillow Group

OPPOSITION: (Verified 8/14/24)

None received

ARGUMENTS IN SUPPORT: According to a coalition of the bill’s supporters, including the bill’s sponsor, the California Land Title Association:

California law supports the use of electronic documents, electronic signatures, and electronic notarization. However, not all county recorder offices are equipped to accept electronic documents for recording purposes.

As provided under Government Code Section 27201, documents intended for recordation are required to contain an original signature or be a certified copy of an original. A county recorder may refuse to accept any document that does not meet recording requirements.

As a result, there is no method for recording a remotely notarized document in the 13 of California’s 58 counties (or approximately 22%) that lack the capacity to accept electronic documents, because there is currently no mechanism under state law to create a certified paper copy from an electronic document for recording purposes.

AB 2004 would resolve this by putting in place a simple certification process, in which a “disinterested custodian” can certify before a notary that a paper copy of an electronic document is a correct copy for purposes of recording in real property records.

ASSEMBLY FLOOR: 73-0, 5/21/24

AYES: Addis, Aguiar-Curry, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Chen, Connolly, Davies, Dixon, Essayli, Flora, Mike Fong, Vince Fong, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

NO VOTE RECORDED: Cervantes, Megan Dahle, Friedman, Gabriel, Holden, Mathis, Luz Rivas

Prepared by: Allison Whitt Meredith / JUD. / (916) 651-4113

8/18/24 8:51:14

**** END ****

1. Gov. Code, § 27201. ↑

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anna Caballero, Chair

2023 - 2024 Regular Session

AB 2004 (Petrie-Norris) - County recorder: recordation of documents

Bill Summary:

AB 2004 establishes a method for recording electronically signed and notarized documents.

Fiscal Impact:

• Likely no cost to county recorders to accept for recording a tangible copy of an electronic record certified by the process established by this bill. County recorders charge fees for their recording services, which would likely offset any minor costs incurred under this bill.
• Costs (General Fund) to the Secretary of State (SOS), possibly in the low hundreds of thousands of dollars. SOS estimates one-time staffing costs of approximately $190,000 to update its Notary Public Handbook, training materials, website, and regulations, and provide education to existing notaries and education vendors.

Background:

County recorders are responsible for accepting, recording, storing, and retrieving a variety of documents. These include deeds, deeds of trust, court decrees, documents affecting title to real property, commercial code filings, subdivision maps, births, marriages, and other items. Existing law authorizes recorders to charge fees for each document recorded at $10 for the first page and $3 for each additional page, and allows additional fees for specified purposes. County recorders must record any types of instrument or other document that state law tells the recorder to record.

Under current law, a county recorder can accept for recordation either a document that contains original signatures, or a “certified copy” of the original. All counties accept hard copies of documents with original signatures and certified hard copies, but not all counties accept electronic documents. If an original document is an electronic document—which is increasingly the case, particularly when the parties have a title document notarized via remote online notarization—there is no hard copy of the original that can be recorded, and current law lacks a method for certifying a print-out of an electronic document as a certified copy of an electronic document.

Proposed Law:

• Allows a disinterested custodian to certify that a tangible copy of an electronic record is an accurate reproduction of the electronic record and specifies the form that must be used for such certification.
  
• Defines a “disinterested custodian” as a person who has access to an electronic record displaying intact tamper-evident security procedures and who is not the grantee, beneficiary, or otherwise a person who directly benefits from the electronic record.
  
• Requires a county recorder to accept for recording a tangible copy of an electronic record bearing electronic signatures and containing the required certificate.
  
• Reduces, from one year to 90 days, the cure period for any instrument affecting the title to real property kept in the office of any county recorder.

-- END --

SENATE COMMITTEE ON LOCAL GOVERNMENT

Senator María Elena Durazo, Chair

2023 - 2024 Regular

County recorder: recordation of documents

Establishes a method for recording electronic documents.

Background

County recorders. County recorders are responsible for accepting, recording, storing, and retrieving a variety of documents. These include deeds, deeds of trust, court decrees, documents affecting title to real property, commercial code filings, subdivision maps, births, marriages, and other items. Existing law authorizes recorders to charge fees for each document recorded at $10 for the first page and $3 for each additional page, and allows additional fees for specified purposes. County recorders must record any types of instrument or other document that state law tells the recorder to record.

Under current law, a county recorder can accept for recordation either a document that contains original signatures, or a “certified copy” of the original. All counties accept hard copies of documents with original signatures and certified hard copies, but not all counties accept accept electronic documents. If an original document is an electronic document—which is increasingly the case, particularly when the parties have a title document notarized via remote online notarization—there is no hard copy of the original that can be recorded, and current law lacks a method for certifying a print-out of an electronic document as a certified copy of an electronic document.

The California Land Title Association wants the Legislature to establish a method for recording electronic documents in counties that don’t accept them.

Proposed Law

Assembly Bill 2004 allows a “disinterested custodian” of an electronic record to certify that a tangible copy is a complete and accurate reproduction of the electronic record. For the purposes of the bill, “disinterested custodian” means a person who has access to an electronic record displaying intact tamper-evident security procedures and who is not the grantee, beneficiary, or otherwise a person who directly benefits from the electronic record.

The certification must be subscribed and sworn to, or affirmed, by the disinterested custodian before a notary public and accompanied by a jurat attached thereto pursuant to existing law. AB 2004 specifies the form that the certification must take, and provides that a certification made by a disinterested custodian pursuant to this subdivision is separate and distinct from a certified copy issued by a recorder for specified purposes.

The recorder must accept for recording a tangible copy of an electronic record bearing electronic signatures and containing a certificate in the form required by the bill as a certified copy of an original if the electronic record is otherwise an instrument or notice authorized or required to be recorded and the tangible copy satisfies the requirements of existing law.

AB 2004 says that a tangible copy of an electronic record, once copied into the proper book of record, kept in the office of any county recorder, imparts notice of its contents to subsequent purchasers and encumbrancers, notwithstanding any failure of the person making the certification to qualify as a disinterested custodian.

AB 2004 also reduces the time frame—from one year to 90 days—after which any instrument affecting the title to real property that has been recorded imparts notice of its contents to subsequent purchasers and encumbrancers, notwithstanding any defect, omission, or informality in the execution of the instrument, or in the certificate of acknowledgement, or in the absence of any such certificate.

AB 2004 defines its terms and includes findings and declarations to support its purposes.

Comments

1. Purpose of the bill. According to the author, “This bill would enact two changes aimed at improving the recordability of remotely notarized documents in California. First, it would allow for the certification of paper copies of electronic documents as accurate representations entitled to be recorded in public records. The proposed certification process, which would involve a document custodian certifying before a notary that a paper document is an accurate copy of the electronic document, is simple, secure, and would enable the residents of 13 California counties that today only accept paper documents for recording to benefit from RON as an option when they look to have documents notarized.

“Separately, the bill would ensure that valid documents containing technical defects or omissions in an acknowledgment form provide constructive notice of an instrument 90 days after being recorded in public records, as opposed to the one-year period in place under current law.

“These provisions will enhance access to and increase the usability of RON across the state, as well as protect individuals from unintended difficulties should documents contain unintended technical notarial defects. These provisions are commonly contained in other state’s recording statutes; 35 states allow notaries to certify paper copies of electronic documents for recording purposes, while at least 17 states provide that documents containing technical defects or omissions provide immediate constructive notice upon recording.”

2. Mandate. The California Constitution requires the state to reimburse local governments for the costs of new or expanded state mandated local programs. Because AB 2004 adds to the duties of county recorders and expands the crime of perjury, Legislative Counsel says that the bill imposes a new state mandate. AB 2004 disclaims the state's responsibility for providing reimbursement by citing local governments’ authority to charge for the costs of implementing the bill’s provisions and because the bill expands the definition of a crime.

3. Incoming! The Senate Judiciary Committee approved AB 2004 at its June 18^th hearing on a vote of 10-0. The Senate Local Government Committee is hearing the bill as the Committee of second reference.

Assembly Actions

Assembly Judiciary Committee: 10-0

Assembly Appropriations Committee: 15-0

Assembly Floor: 73-0

Support and Opposition

(6/28/24)

Support: California Association of Realtors
California Bankers Association
California Credit Union League
California Escrow Association
California Land Title Association
California Mortgage Bankers Association
First American Financial Corporation
National Notary Association
Proof
Zillow Group

Opposition: None submitted.

-- END --

SENATE JUDICIARY COMMITTEE

Senator Thomas Umberg, Chair

2023-2024 Regular Session

Bill No: AB 2004 (Author:Petrie-Norris)

Version: March 13, 2024

Hearing Date: June 18, 2024

Fiscal: Yes

Urgency: No

Consultant: AWM

SUBJECT

County recorder: recordation of documents

DIGEST

This bill shortens the window before a title document that was recorded despite having technical defects can provide notice of its content to subsequent purchasers or encumbrancers, from one year to 90 days; and establishes a procedure by which a tangible copy of an electronic record can be certified for purposes of recordation in a county that does not accept electronic original documents.

EXECUTIVE SUMMARY

Under current law, a county recorder is authorized to accept for recordation either a document that contains original signatures, or a “certified copy” of the original. All counties accept hard copies of documents with original signatures and certified hard copies, but not all counties are able to accept electronic documents. If an original document is an electronic document—which is increasingly the case, particularly when the parties have a title document notarized via remote online notarization—there is no hard copy of the original that can be recorded, and current law lacks a method for certifying a print-out of an electronic document as a certified copy of an electronic document.

This bill establishes a mechanism by which a copy of an electronic document can be certified as a copy for purposes of recordation. As currently in print, the bill permits a notary public to observe the copy of an electronic document being printed and certify that the printout is a copy of the electronic document. In response to feedback from stakeholders, including the Office of the Secretary of State, the author has proposes to amend the bill to establish a certification mechanism whereby a disinterested party can certify, before a notary public and under penalty of perjury, that a printed copy of a document is an accurate reproduction of the electronic document. The bill also shortens the window before a title document that was recorded despite having technical defects can impart notice, from one year to 90 days.

This bill is sponsored by the California Land Title Association and is supported by the California Association of Realtors, the California Bankers Association, the California Credit Union League, the California Escrow Association, the California Mortgage Bankers Association, First American Financial Corporation, the National Notary Association, Proof, and Zillow Group. This bill is opposed by the California League of Independent Notaries. If this Committee passes this bill, it will then be heard by the Senate Local Government Committee.

PROPOSED CHANGES TO THE LAW

Existing law:

1. Provides that an estate in real property, other than an estate at will or for a term not exceeding one year, can be transferred only by operation of law, or by an instrument in writing, subscribed by the party disposing of the property, or by their agent. (Civ. Code, § 1091.)
2. Provides that every grant of an estate in real property is conclusive against the grantor, also against every one subsequently claiming under the grantor, except a purchaser or incumbrancer who in good faith and for a valuable consideration acquires title or lien by an instrument that is first duly recorded. (Civ. Code, § 1107.)
3. Provides that an instrument that may be recorded must be recorded by the County Recorder of the county in which the real property affected by the instrument is situated. (Civ. Code, § 1169.)
4. Provides that an instrument is deemed to be recorded when, being duly acknowledged or proved and certified, it is deposited in the Recorder’s office, with the proper officer, for record. (Civ. Code, § 1170.)
5. Authorizes a notary public or other specified officer to take an acknowledgement of an instrument provided that the officer taking the acknowledgement has satisfactory evidence that the person making the acknowledgement is the individual who is described in and who executed the instrument, as specified. (Civ. Code, §§ 1181, 1185.)
6. Provides that every conveyance of real property or an estate for years therein acknowledged or proved and certified and recorded as prescribed by law from the time it is filed with the recorder for record is constructive notice of the contents thereof to subsequent purchasers and mortgagers; and a certified copy of such a recorded conveyance may be recorded in any other county and when so recorded the record thereof shall have the same force and effect as though it was of the original conveyance and where the original conveyance has been recorded in any county wherein the property therein is not situated a certified copy of the recorded conveyance may be recorded in the county where such property is situated with the same force and effect as if the conveyance has been recorded in that county. (Civ. Code, § 1213.)
7. Provides that an instrument affecting the title to real property, one year after the same has been copied into the proper book of record, kept in the office of any county recorder, imparts notice of its contents to subsequent purchasers and encumbrancers, notwithstanding any defect, omission, or informality in the execution of the instrument, or in the certificate or acknowledgement thereof, or in the absence of any such certificate.
   1. Duly certified copies of the record of any such instrument may be read in evidence with like effect as copies of an instrument duly acknowledged and recorded, provided that, when such copying in the proper book of record occurred within five years prior to the trial of the action, it is first shown that the original instrument was genuine. (Civ. Code, § 1207.)
8. Establishes, within each county, the county recorder, who shall, upon the payment of proper fees and taxes, accept for recordation any instrument, paper, or notice that is authorized or required by statute, or court order to be recorded, or authorized or required to be recorded by a local ordinance that relates to the recordation of any instrument, paper, or notice that relates to real property.
   1. The county recorder shall not refuse to record any instrument, paper, or notice that is authorized or required by statute, court order, or local ordinance that relates to the recordation of any instrument, paper, or notice that relates to real property to be recorded on the basis of its lack of legal sufficiency.
   2. Each instrument, paper, or notice shall contain an original signature or signature, except as otherwise provided by law, or be a certified copy of the original. (Gov. Code, § 27201.)
9. Provides that it is the duty of a notary public, when requested:
   1. For a notary public employed by a financial institution, to demand acceptance and payment in specified forms of currency, as provided.
   2. To take the acknowledgement or proof of advance health care directives, powers of attorney, mortgages, deeds, grants, transfers, and other instruments of writing executed by any person, and to give a certificate of that proof or acknowledgement, endorsed or attached to the instrument; a notary public may not accept any acknowledgement or proof of any instrument that is incomplete. The certificate shall be signed by the notary public in their own handwriting.
   3. To take depositions and affidavits, and administer oaths and affirmations, in all matters incident to the duties of the office, or to be used before any court, judge, officer, or board; any deposition, affidavit, or affirmation shall be signed by the notary public in their own handwriting.
   4. To certify copies of powers of attorney under Probate Code section 4307. The certification shall be signed by the notary public in their own handwriting.
   5. To furnish certified copies of their journal or respond to written requests from the Secretary of State’s office, as specified. (Gov. Code, § 8205.)
10. Defines the following relevant terms:
    1. “Electronic record” means a record created, generated, sent, communicated, received, or stored by electronic means.
    2. “Electronic signature” means an electronic sound, symbol, or process attached to or logically associated with an electronic record and executed or adopted by a person with the intent to sign the electronic record, including a “digital signature,” as defined. (Civ. Code, § 1633.2.)

This bill:

1. Reduces the time frame after which an instrument affecting the title to real property that has been recorded imparts notice of its contents to subsequent purchasers and encumbrancers, notwithstanding any defect, omission, or informality in the execution of the instrument, or in the certificate of acknowledgement, or in the absence of any such certificate, from one year to 90 days.
2. Provides that a notary public may certify that a tangible copy of an electronic record is an accurate reproduction of the electronic record.
3. Provides that the certification must be in substantially in the same form as the below and be signed by the person making the certification:

I hereby certify that the attached instrument entitled document title, if applicable, dated document date, and containing page count pages is an accurate reproduction of an electronic record printed by me or under my supervision. At the time of printing, no security features present on the electronic record indicated any changes or errors in an electronic signature or other information in the electronic record after the completion of the electronic record’s creation, execution, or notarization.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

Dated: ______

Name: ______

Signature: ______

1. Provides that it is not a duty of a notary public, as set forth in Government Code section 8205, to provide a certification set forth in 2), and that a notary public may decline a request to print and certify a tangible record of an electronic record.
2. Requires a recorder to accept for recording a tangible copy of an electronic record bearing electronic signatures and containing a certificate in the form required by 3) as a certified copy of an original, provided that the electronic record is otherwise an instrument or notice that is authorized or required to be recorded and the tangible copy satisfies the requirements of Government Code section 27201.
3. Provides that, for purposes of 2)-5), “electronic record” and “electronic signature” have the same meaning as in Civil Code section 1633.2.

COMMENTS

1. Author’s comment

According to the author:

This bill would enact two changes aimed at improving the recordability of remotely notarized documents in California. First, it would allow notaries public to certify paper copies of electronic documents as accurate representations entitled to be recorded in public records. The proposed certification process, widely used in other states, is simple: a notary reviews an electronic document, ensures that it is still locked with a tamper-evident seal, prints the document, ensures that the document printed correctly, and completes the simple certification form. Certification would also be permissive, meaning that notaries would be perfectly within their rights to decline to certify should they so choose.

Separately, the bill would ensure that valid documents containing technical defects or omissions in an acknowledgment form provide constructive notice of an instrument 90 days after being recorded in public records, as opposed to the one-year period in place under current law.

These provisions will enhance access to and increase the usability of [remote online notarization] across the state, as well as protect individuals from unintended difficulties should documents contain unintended technical notarial defects. These provisions are commonly contained in other state’s recording statutes; 35 states allow notaries to certify paper copies of electronic documents for recording purposes, while at least 17 states provide that documents containing technical defects or omissions provide immediate constructive notice upon recording.

2. A brief explainer on electronic documents

For most of human history, legal documents—contracts, deeds, etc.—had to be created in a tangible format, which has evolved from rock to papyrus to vellum to paper. Now, however, various technologies enable people to create legal documents entirely electronically. For purposes of this analysis, it is important to understand the difference between a copy of a tangible original document and an electronic original document.

When a document is executed in the physical world—say, when two parties sign a paper contract in ink—that tangible document is the original document. A person could make electronic copies of the tangible original, including by scanning the document to create a pdf version, but those electronic copies will only ever be copies of the original.

An electronic original document, conversely, can never exist in physical form. An electronic original document is created when the execution takes place entirely through digital means—for example, where two parties use an electronic signature platform to execute a contract. The original document, in that case, is the electronic record created through the electronic signature platform; physical printouts of the document are considered copies of the electronic original. This has implications for recordation and other legal processes when not all participants are capable of accepting electronic original documents.

3. Background on remote online notarization and issues with recording electronic original documents

Beginning with Virginia in 2011,^[1] most states have adopted “remote online notarization,” a.k.a. “RON.”^[2] Under SB 696 (Portantino, Ch. 291, Stats. 2023), enacted last year, California notaries will be able to begin notarizing documents remotely in 2030, unless the Secretary of State finishes its necessary technology project sooner.^[3] However, SB 696 also made it clear that a California resident may have a document remotely notarized by an out-of-state notary providing RON consistent with the laws of the state in which the notary public is licensed. In other words, California residents can have their documents notarized remotely, but only by out-of-state notaries public.

As the acronym implies, RON is conducted both remotely and online, meaning the resulting notarized document is an electronic document. The RON process generally requires the person seeking the notarization to upload their document in digital form to a RON platform and go through identification verification; assuming the person is who they say they are, the notary and the person interact through a real-time audiovisual feed, which culminates in the notary affixing their electronic seal and/or electronic signature onto the electronic document.

An electronic document notarized through RON is the original document. A printout of the notarized document is not the original document—as discussed in Part 2, an electronic original cannot, by definition, be converted to a tangible medium without losing its status as the original document.

Under current law, a county recorder is authorized to accept for recordation either a document that contains original signatures, or a “certified copy” of the original.^[4] In counties that accept electronic documents for recordation, this requirement does not pose a problem: the recorder accepts the electronic original document digitally, and the effect is the same as if the document were a tangible original.

According to the author and sponsor, however, not all counties are currently capable of accepting electronic documents for recordation. This means the only option for a person with an electronic original document that needs to be recorded is to submit a certified copy of the original—except there is currently no statutory provision for the creation of a certified tangible copy of an electronic document relating to real property.

4. This bill provides a mechanism for the creation of a certified copy of an electronic document relating to real property, and shortens the amount of time after which a recorded document with technical errors can provide notice of its contents

This bill is intended to provide a mechanism by which an electronic document can be converted into a tangible paper copy that can be recorded, thereby providing notice of the contents of the document. As currently in print, the bill permits a notary public to certify a tangible copy of an electronic document; the notary public must print the document themselves, or observe it being printed, and determine that the document is a true and correct copy of the electronic record and that no security features on the document indicated that the document had been tampered with. The certification must be under penalty of perjury.

Both the Office of the Secretary of State and the California League of Independent Notaries oppose this notarial certification mechanism, for similar reasons. Generally speaking, the object to asking a notary public to certify that the contents of a document are accurate when the notary did not notarize the document themselves, has no relationship with the parties, and the document may be scores of pages long. They note that, because Californians can have a document remotely notarized by a notary in any state in which remote notarization is permitted, the notary public is unlikely to be familiar with all the different online notarization platforms and all the different security features used by notaries in each state, meaning the notary is less likely to be confident that they are viewing an authentic electronic record that has not been altered. They also object to the requirement that the certification be made under penalty of perjury, which is not required for notarizations of other documents affecting title.

After discussions with stakeholders, the author proposes amending the bill to establish a different mechanism, whereby a disinterested third party—i.e., a person who does not directly benefit from the record being certified—certifies, under penalty of perjury, that the printed document is a correct copy of the electronic record to the best of their knowledge. This certification must be sworn to before notary public and accompanied by a jurat. The complete amendments proposed by the author are set forth in Part 5 of this analysis. At this time, the opponents of the bill have not formally removed their opposition, but the amendments appear responsive to many of their concerns. The author’s discussion with stakeholders are ongoing, and they are collectively continuing to work on fine-tuning the amendments proposed below.

In addition to adding a mechanism for certifying tangible copies of electronic records, this bill shortens the period of time before which a recorded document that contains errors, such as omitting signatures, can provide notice of its contents to subsequent purchasers and encumbrancers, from one year to 90 days. Committee staff are not aware of any objections to this portion of the bill.

5. Amendments

As noted above, the author has agreed to amend the bill to establish a certification procedure whereby a disinterested third party certifies, before a notary public and under penalty of perjury, that a tangible document is a complete and accurate printout of an electronic document. The amendments are set forth as follows, with additions in bold and underline and deletions in strikethrough, subject to any nonsubstantive changes the Office of Legislative Counsel may make.

Amendment

At page 2, lines 17-22, and page 3, lines 1-30, modify the text as follows:

27201.1. (a) (1) A disinterested custodian notary public may certify that a tangible copy of an electronic record may certify that a tangible copy is a complete and an accurate reproduction of the electronic record. The certification shall be subscribed and sworn to (or affirmed) by the disinterested custodian before a notary public and accompanied by a jurat attached thereto pursuant to Section 8282. The certification pursuant to this section shall be in substantially the following form and signed by the person making the certification:

Certification of a Printed Copy of an Electronic Record

I hereby certify that the attached instrument entitled [document title, if applicable], dated [document date], and containing [page count] pages is an accurate reproduction of an electronic record printed by me or under my supervision. At the time of printing, I had access to the electronic record displaying intact and tamper-evident security procedures. no No security features procedures used present on the electronic record indicated any changes or errors in an electronic signature or other information in the electronic record after the completion of the electronic record’s creation, execution, or notarization.

I am not a grantee, beneficiary, or otherwise who directly benefits from the attached instrument or electronic record.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraphs are is true and correct.

Dated: ______

Name: ______

Signature: ______

(2) A certification made by a disinterested custodian pursuant to this subdivision is separate and distinct from a certified copy issued by a recorder for purposes of Section 1530 and 1531 of the Evidence Code. The disinterested custodian shall so identify the certification according to the form required by paragraph (1). It is not a duty of a notary public, as set forth in Section 8205, to provide a certification pursuant to this section. A notary public may decline a request to print and certify a tangible reproduction of an electronic record.

(b) The recorder shall accept for recording a tangible copy of an electronic record bearing electronic signatures and containing a certificate in the form required by subdivision (a) as a certified copy of an original pursuant to subdivision (b) of Section 27201 provided that the electronic record is otherwise an instrument or notice that is authorized or required to be recorded and the tangible copy satisfies the requirements of subparagraph (A) of paragraph (1) of subdivision (a) of Section 27201.

(c) A tangible copy of an electronic record, once copied into the proper book of record, kept in the office of any county recorder, imparts notice of its contents to subsequent purchasers and encumbrancers, notwithstanding any failure of the person making the certification to qualify as a disinterested custodian.

(dc) For purposes of this section, “electronic record,” and “electronic signature,” and “security procedure” have the same meaning as in Section 1633.2 of the Civil Code, and “disinterested custodian” means a person who has access to an electronic record displaying intact tamper-evident security procedures, and who is not the grantee, beneficiary, or otherwise who directly benefits from the electronic record.

6. Arguments in support

According to a coalition of the bill’s supporters, including the bill’s sponsor, the California Land Title Association:

California law supports the use of electronic documents, electronic signatures, and electronic notarization. However, not all county recorder offices are equipped to accept electronic documents for recording purposes.

As provided under Government Code Section 27201, documents intended for recordation are required to contain an original signature or be a certified copy of an original. A county recorder may refuse to accept any document that does not meet recording requirements.

As a result, there is no method for recording a remotely notarized document in the 13 of California’s 58 counties (or approximately 22%) that lack the capacity to accept electronic documents, because there is currently no mechanism under state law to create a certified paper copy from an electronic document for recording purposes.

AB 2004 would resolve this by putting in place a simple certification process, in which a notary reviews an electronic document, ensures that it is still locked with a tamper-evident seal, prints the document, ensures that the document printed correctly, and completes the simple certification form. Certification would also be permissive, meaning that notaries would be perfectly within their rights to decline to certify should they so choose.

7. Arguments in opposition

According to Dr. Shirley Weber, the California Secretary of State:

I respectfully oppose Assembly Bill 2004 as currently drafted. AB 2004 in its current form would drastically and unnecessarily expand the longstanding role of notaries public by authorizing them to review and attest to the content of any electronically signed document, regardless of the page limit or whether the notary had any prior relationship to the document. This is an action that notarial law has never before authorized. It is equally concerning that this measure would so significantly expand the scope of a notary’s duties while attaching a penalty of perjury provision in the event the contents of the document as certified by the notary are less than accurate.

As a result, the adoption of AB 2004 in its current form would have significant practical and fiscal impacts on notary practice, notarial law, regulations, and disciplinary actions. I appreciate the problem this bill is attempting to solve, but there are other avenues to address the issue of “papering out” electronically notarized documents for purposes of recordation. This issue can and should be resolved without expanding the well-established purpose and role of a notary public…

A key deficiency in this bill is that it does not require the notary who would be attesting to the accuracy of the reproduction of an electronic document to have previously performed an acknowledgement or jurat relating to that document. In fact, AB 2004 is silent as to whether the document must have been notarized at all. The likely scenario is that the notary would have no prior connection to the reproduction...

Moreover, it is unreasonable to expect a notary to be able to determine whether the document proffered for certification is the same document that was signed, thus risking the very purpose of notarization, which is nearly always limited to the verification of the identity of the person signing the document, and in some cases, the signer’s oath as to the truthfulness of the document.

SUPPORT

California Land Title Association (sponsor)

California Association of Realtors

California Bankers Association

California Credit Union League

California Escrow Association

California Mortgage Bankers Association

First American Financial Corporation

National Notary Association

Proof
Zillow Group

OPPOSITION

California League of Independent Notaries

Dr. Shirley Weber, California Secretary of State

RELATED LEGISLATION

Pending Legislation: None known.

Prior Legislation:

SB 696 (Portantino, Ch. 291, Stats. 2023) established a framework for the Secretary of State to authorize California notaries to perform remote online notarization, as defined, beginning January 1, 2030, or sooner if the Secretary of State completes its technology project before then.

AB 793 (Petrie-Norris, 2023) would have established a framework for remote online notarization similar, but not identical to, SB 696. AB 793 died in the Assembly Appropriations Committee.

AB 1093 (Jones-Sawyer, 2022) would have established a framework for remote online notarization similar, but not identical to, SB 696. AB 1093 died in the Senate Judiciary Committee.

PRIOR VOTES:

Assembly Floor (Ayes 73, Noes 0)

Assembly Appropriations Committee (Ayes 15, Noes 0)

Assembly Judiciary Committee (Ayes 10, Noes 0)

**************

1. See National Association of Secretaries of State (NASS), Remote Electronic Notarization, https://www.nass.org/initiatives/remote-electronic-notarization (link current as of June 13, 2024). ↑

2. Ibid. ↑

3. Gov. Code, § 8231. ↑

4. Gov. Code, § 27201. ↑

ASSEMBLY THIRD READING

ATR Bill Id:AB 2004

Author:(Petrie-Norris)

As Amended Ver:March 13, 2024

Majority vote

SUMMARY

Makes various changes to the process for recording documents with county recorders to better facilitate the use of remote online notarization in California, which was authorized in 2023.

Major Provisions

1. Provides that for any instrument affecting the title to real property, 90-days after the same has been copied into the proper book of record, kept in the office of any county recorder, imparts notice of its contents to subsequent purchasers and encumbrancers, notwithstanding any defect, omission, or informality in the execution of the instrument, or in the certificate of acknowledgment thereof, or the absence of any such certificate.
2. Permits a notary public to certify that a tangible copy of an electronic record is an accurate reproduction of the electronic record.
3. Specifies the form of the certification described in 2) and requires a notary to swear under the penalty of perjury the following, "I hereby certify that the attached instrument entitled document title, if applicable, dated document date, and containing page count pages is an accurate reproduction of an electronic record printed by me or under my supervision. At the time of printing, no security features present on the electronic record indicated any changes or errors in an electronic signature or other information in the electronic record after the completion of the electronic record's creation, execution, or notarization."
4. Permits a notary public to decline a request to print and certify a tangible reproduction of an electronic record.
5. Requires a county recorder to accept for recording a tangible copy of an electronic record bearing electronic signatures and containing a certificate in the form required by 3) as a certified copy of an original document provided that the electronic record is otherwise an instrument or notice that is authorized or required to be recorded and the tangible copy satisfies the requirements of existing law related to remote online notarizations.

COMMENTS

In 2023, the Legislature adopted SB 696 (Portantino) Chapter 291, Statutes of 2023, which approved the use of remote online notarizations in California after years of Legislative wrangling over the topic. Among the benefits of online notarization are fewer errors, as computer software is frequently more adept at catching missing or erroneous information than humans, and the ability for Californians in living rural areas to increase their access to notarial services. Reflecting these realities, this bill makes minor updates to SB 696 to ensure that online notarization can be efficiently deployed in California.

In order to prevent fraud and to ensure that the person signing important documents is who they claim to be, certain documents must be notarized. In order for a document to be notarized, a notary public must verify the identity of a signatory then affix the notarial seal to the document. Around the onset of the pandemic, and required social distancing, a legislative push began to enact a set of rules permitting and governing remote online notarization in California. That effort culminated in the passage of SB 696 in 2023. That bill established a broad framework to ensure that documents notarized remotely were secure, identification of signatories would be accurate, data would be properly retained, and a regulatory process for the licensure of notaries certified to perform remote notarizations by the Secretary of State.

Recognizing the complexities of online notarizations, SB 696 required the Secretary of State to complete the development of regulations regarding the process. That rulemaking may take until 2030. However, the text of SB 696 does permit the use of online notarization as soon as the rulemaking is complete, therefore any deficiencies in the law related to online notarization should be address as quickly as possible to ensure the smooth rollout of the technology in California.

Under existing law, a document effecting property is not entitled to be filed if it contains errors. Nonetheless, imperfect property-related documents are accepted by government officials all the time. For example, it is not entirely uncommon for a person purchasing a home, as well as the notary overseeing the signing of sales documents, to erroneously omit a signature in the lengthy series of documents that must be signed at closing. While many of these mistakes can be identified and remedied, sometimes they are not. Because these errors do not constitute fraud, California law deems such errors "cured" one year after the document was copied into government records.

One of the principal benefits of utilizing online notarial tools is the improved accuracy of the documents. For example, because a computer system is tracking the places in which the document is to be signed, the likelihood that a signature or initial is erroneously omitted from a document decreases dramatically. Accordingly, this measure will now shorten the sure period to 90 days.

One of the leading arguments in favor of remote online notarization would be the increased opportunities for Californians living in rural areas, without a significant supply of notaries, to increase their access to notarial services. However, proponents of this bill now note that 13 of California's 58 counties, ironically many of the very rural counties that might have received the most benefit of online notarial services, do not accept electronically filed documents. Seeking to ensure that consumers in these counties that utilize remote notarial services are not left unable to file their notarized documents, this bill provides for a process whereby the electronic document can be reprinted and accompanied by an attestation from a notary that the document is a valid reprint of the original electronic document.

Recognizing that, in some cases, the original notary may not be local, this bill permits any licensed notary to perform the certification. In practice, this would mean that a party would have to take their remotely notarized electronic version to a local notary who would then be able to print out the document and attest to its validity. Although this two-step process appears to significantly undermine the convenience of online notarization, similar processes are in place in 35 other states that permit online notarization.

According to the Author

This bill would enact two changes aimed at improving the ability to record remotely notarized documents in California. First, it would allow notaries public to certify paper copies of electronic documents as accurate representations entitled to be recorded in public records. The proposed certification process, widely used in other states, is simple: a notary reviews an electronic document, ensures that it is still locked with a tamper-evident seal, prints the document, ensures that the document printed correctly, and completes the simple certification form. Certification would also be permissive, meaning that notaries would be perfectly within their rights to decline to certify should they so choose.

Separately, the bill would ensure that valid documents containing technical defects or omissions in an acknowledgment form provide faster constructive notice of an instrument when recorded in public records, as opposed to the one-year period in place under current law.

These provisions will enhance access to and increase the usability of remote online notarization across the state, as well as protect individuals from unintended difficulties should documents contain unintended technical notarial defects. These provisions are commonly contained in other state's recording statutes; 35 states allow notaries to certify paper copies of electronic documents for recording purposes, while at least 17 states provide that documents containing technical defects or omissions provide immediate constructive notice upon recording.

Arguments in Support

A coalition of supporters, including but not limited to the California Land Title Association, the National Notary Association, and the California Association of Realtors write in support of this bill:

AB 2004 would modernize California's recorded document laws by authorizing California notaries to certify paper copies of electronic documents – including documents notarized via remote online notarization (RON) – so that they may be recorded in California's real property records and, separately, shorten the time at which recorded documents provide constructive notice if they contain a technical error.

Current law does not provide a mechanism to certify paper copies of electronic documents for recording purposes, leaving 22% of California counties unable to participate in RON. California law supports the use of electronic documents, electronic signatures, and electronic notarization. However, not all county recorder offices are equipped to accept electronic documents for recording purposes.

AB 2004 would resolve this by putting in place a simple certification process, in which a notary reviews an electronic document, ensures that it is still locked with a tamper-evident seal, prints the document, ensures that the document printed correctly, and completes the simple certification form. Certification would also be permissive, meaning that notaries would be perfectly within their rights to decline to certify should they so choose.

Arguments in Opposition

As noted, the California League of Independent Notaries is in opposition to the bill, unless amendments are taken to provide notaries with greater legal certainty when verifying paper copies of electronic notarial acts. They write:

Notaries are entrusted with important responsibilities that directly impact legal transactions and documentation. However, without the designation of being an official duty under Section 8205, the proposed certification would not be protected by a notary's bond or errors or omissions insurance. This exposes notaries to undue legal risks that could have severe consequences for their livelihoods.

In its current form, AB 2004 places notaries under felony liability with no protections of guidance. This not only undermines the integrity of notarial acts but also poses significant risk to the public. Therefore, we urge you to amend the bill to include adequate protections for notaries, clear guidelines for the certification process, and a defined fee structure.

FISCAL COMMENTS

According to the Assembly Appropriations Committee:

1. Likely no cost to county recorders to accept for recording a tangible copy of an electronic record certified by the process established by this bill. County recorders charge fees for their recording services, which would likely offset any minor costs incurred under this bill.
2. Costs (General Fund) to the Secretary of State (SOS), possibly in the low hundreds of thousands of dollars. SOS estimates one-time staffing costs of approximately $190,000 to update its Notary Public Handbook, training materials, website, and regulations, and provide education to existing notaries and education vendors.

According to the Legislative Analyst's Office, the General Fund faces a structural deficit in the tens of billions of dollars over the next several fiscal years.

VOTES

ASM JUDICIARY: 10-0-2

YES: Kalra, Dixon, Bauer-Kahan, Bryan, Connolly, Maienschein, McKinnor, Pacheco, Reyes, Sanchez

ABS, ABST OR NV: Haney, Waldron

ASM APPROPRIATIONS: 15-0-0

YES: Wicks, Sanchez, Arambula, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Grayson, Haney, Hart, Jim Patterson, Pellerin, Ta, Villapudua

UPDATED

VERSION: March 13, 2024

CONSULTANT: Nicholas Liedtke / JUD. / (916) 319-2334 FN: 0002998

Date of Hearing: March 20, 2024

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 2004

Author:(Petrie-Norris) – As Amended Ver:March 13, 2024

Urgency: No State Mandated Local Program: Yes Reimbursable: No

SUMMARY:

This bill creates a process by which a tangible copy of an electronically signed and notarized document can be filed with a county recorder and reduces the time period that must elapse before an error in a real property document filed with a county recorder is considered cured.

Specifically, this bill:

1. Allows a notary public to certify that a tangible copy of an electronic record is an accurate reproduction of the electronic record and specifies the form that must be used for such certification.
2. Requires a county recorder to accept for recording a tangible copy of an electronic record bearing electronic signatures and containing a certificate in the form specified in 1, above.
3. Reduces, from one year to 90 days, the cure period for any instrument affecting the title to real property kept in the office of any county recorder.

FISCAL EFFECT:

1. Likely no cost to county recorders to accept for recording a tangible copy of an electronic record certified by the process established by this bill. County recorders charge fees for their recording services, which would likely offset any minor costs incurred under this bill.
2. Costs (General Fund) to the Secretary of State (SOS), possibly in the low hundreds of thousands of dollars. SOS estimates one-time staffing costs of approximately $190,000 to update its Notary Public Handbook, training materials, website, and regulations, and provide education to existing notaries and education vendors.

According to the Legislative Analyst’s Office, the General Fund faces a structural deficit in the tens of billions of dollars over the next several fiscal years.

COMMENTS:

1. Purpose. According to the author:

[The bill’s] provisions will enhance access to and increase the usability of remote online notarization across the state, as well as protect individuals from unintended difficulties should documents contain unintended technical notarial defects. These provisions are commonly contained in other state’s recording statutes; 35 states allow notaries to certify paper copies of electronic documents for recording purposes, while at least 17 states provide that documents containing technical defects or omissions provide immediate constructive notice upon recording.

1. Background. Existing law requires numerous types of documents to be signed in the presence of a notary public to ensure that the identity of the person signing the document can be verified. For example, real estate transactions, powers of attorney, and probate documents all require notarization. Notaries are required to register with and are regulated by SOS. Last year, after years of negotiations, the Legislature passed SB 696 (Portantino), Chapter 291, Statutes of 2023, which authorizes use of remote online notarization in California, establishes data and consumer safety measures, and requires SOS to develop regulations to govern the licensure of notaries certified to perform remote online notarization.

This bill seeks to address a few issues that have already been identified following passage of SB 696. First, this bill allows a notary to certify that a tangible copy of an electronic record is an accurate reproduction of the record, and requires a county recorder to accept such a certified record. Not all counties in California currently accept electronically filed documents. The goal of this provision is to allow residents of counties that do not accept electronically filed documents to file tangible copies of documents that have been notarized online. As discussed in the analysis of this bill by the Assembly Committee on Judiciary, stakeholders are continuing to negotiate this portion of the bill due to concerns over increased liability for notaries.

Second, the bill reduces the period of time that must elapse before an error in a specified real property document filed with a county recorder is considered cured. Documents that are otherwise accurate are sometimes filed with mistakes in them – for example, a missing signature or an incorrect date. These types of mistakes are generally not fraudulent, so the law establishes a period of time in which other parties may object to the filed version of the document based on a mistake. If no one objects during that time period, the mistake in the document is considered “cured” and the document is deemed acceptable. Online notarization tools are supposed to make it easier to catch mistakes before documents are filed, so proponents of this bill believe a shorter cure period is warranted. The bill changes the cure period from one year to 90 days.

Analysis Prepared by: Annika Carlson / APPR. / (916) 319-2081

Date of Hearing: March 12, 2024

ASSEMBLY COMMITTEE ON JUDICIARY

Ash Kalra, Chair

ABPCA Bill Id:AB 2004

Author:(Petrie-Norris) – As Introduced Ver:January 31, 2024

As Proposed to be Amended

SUBJECT: County recorder: recordation of documents

KEY ISSUES:

1. To accommodate counties that do not accept the electronic filing of certain government documents, in the wake of the adoption of remote online notarization in 2023, should a process be created to return an electronically signed and notarized document back into a tangible document?
2. Should the cure period for instruments affecting the title to real property be reduced from twelve MONTHS to Ninety days?

SYNOPSIS

In 2023, after years of legislative debate, SB 696 (Portantino) Chap. 291, Stats. 2023, was enacted to authorize the use of remote online notarization in California. Although the timeline for full deployment of online notarization is several years away, this measure begins to address some technical issues that may present themselves as a result of the passage of SB 696. This measure addresses two primary issues. First, as proposed to be amended, this bill recognizes that notarizing electronic documents will likely cut down on the amount of errors, including omitted signatures, in certain property transaction forms. Accordingly, this bill would lower the cure period for harmless errors in property related documents from one year to 90 days. Secondly, despite the advantages of online notarization for some rural communities, this bill recognizes that thirteen California counties do not accept electronic filings of certain documents. To ensure that remotely notarized electronic documents can be filed in those jurisdictions, this bill adopts a process to print and verify electronically notarized documents for filing in these counties.

This measure is supported by many members of the coalition behind SB 696 including the California Land Title Association, the National Notary Association, and the California Association of Realtors. The supporters contend that the bill is needed to ensure that California consumers and local governments are ready when remote online notarization becomes available in this state. The bill, specifically the provisions related to certifying the print version of electronic documents, is opposed by the California League of Independent Notaries. The opponents of this measure believe those provisions, while voluntary, expose notaries to potential liability. The author is pledging to work with stakeholders to ensure that the electronic to print document process can be accomplished in an efficient and effective manner for both notaries and consumers.

SUMMARY: Makes various changes to the process for recording documents with county recorders to better facilitate the use of remote online notarization in California, which was authorized in 2023. Specifically, this bill:

1. Provides that for any instrument affecting the title to real property, 90-days after the same has been copied into the proper book of record, kept in the office of any county recorder, imparts notice of its contents to subsequent purchasers and encumbrancers, notwithstanding any defect, omission, or informality in the execution of the instrument, or in the certificate of acknowledgment thereof, or the absence of any such certificate.
2. Permits a notary public to certify that a tangible copy of an electronic record is an accurate reproduction of the electronic record.
3. Specifies the form of the certification described in 2) and requires a notary to swear under the penalty of perjury the following, “I hereby certify that the attached instrument entitled document title, if applicable, dated document date, and containing page count pages is an accurate reproduction of an electronic record printed by me or under my supervision. At the time of printing, no security features present on the electronic record indicated any changes or errors in an electronic signature or other information in the electronic record after the completion of the electronic record’s creation, execution, or notarization.”
4. Permits a notary public to decline a request to print and certify a tangible reproduction of an electronic record.
5. Requires a county recorder to accept for recording a tangible copy of an electronic record bearing electronic signatures and containing a certificate in the form required by 3) as a certified copy of an original document provided that the electronic record is otherwise an instrument or notice that is authorized or required to be recorded and the tangible copy satisfies the requirements of existing law related to remote online notarizations.

EXISTING LAW:

1. Authorizes the practice of remote online notarization and directs the Secretary of State to develop rules and regulations governing the practice. (Government Code Section 8231.2.)
2. Requires, in accordance with the regulations developed pursuant to 1), a notary public to record each online notarial act performed by the notary public in one tangible sequential journal and one or more secure electronic journals. (Government Code Section 8231.5 (a).)
3. Requires the electronic journal specified in 2) to be capable of providing both physical and electronic copies of any entry made therein. (Government Code Section 8231.5 (b).)
4. Requires a notary public to provide to a member of the public a copy of the entry in the notary public’s journal corresponding to the requested transaction in tangible format or in an electronic format in accordance with rules and regulations adopted by the Secretary of State. (Government Code Section 8231.5 (g).)
5. Defines “electronic record” as a record created, generated, sent, communicated, received, or stored by electronic means. (Civil Code Section 1633.2 (g).)
6. Defines “electronic signature as an electronic sound, symbol, or process attached to or logically associated with an electronic record and executed or adopted by a person with the intent to sign the electronic record.” (Civil Code Section 1633.2 (h).)
7. Provides that for any instrument affecting the title to real property, one year after the same has been copied into the proper book of record, kept in the office of any county recorder, imparts notice of its contents to subsequent purchasers and encumbrancers, notwithstanding any defect, omission, or informality in the execution of the instrument, or in the certificate of acknowledgment thereof, or the absence of any such certificate. (Civil Code Section 1207.)
8. Provides that duly certified copies of the record of any such instrument specified in 7) may be read in evidence with like effect as copies of an instrument duly acknowledged and recorded; provided, when such copying in the proper book of record occurred within five years prior to the trial of the action, it is first shown that the original instrument was genuine. (Ibid.)

FISCAL EFFECT: As currently in print this bill is keyed fiscal.

COMMENTS: In 2023, the Legislature adopted SB 696 (Portantino) Chap. 291, Stats. 2023, which approved the use of remote online notarizations in California after years of Legislative wrangling over the topic. Among the benefits of online notarization are fewer errors, as computer software is frequently more adept at catching missing or erroneous information than humans, and the ability for Californians in living rural areas to increase their access to notarial services. Reflecting these realities, this bill makes minor updates to SB 696 to ensure that online notarization can be efficiently deployed in California. In support of the measure the author states:

This bill would enact two changes aimed at improving the ability to record remotely notarized documents in California. First, it would allow notaries public to certify paper copies of electronic documents as accurate representations entitled to be recorded in public records. The proposed certification process, widely used in other states, is simple: a notary reviews an electronic document, ensures that it is still locked with a tamper-evident seal, prints the document, ensures that the document printed correctly, and completes the simple certification form. Certification would also be permissive, meaning that notaries would be perfectly within their rights to decline to certify should they so choose.

Separately, the bill would ensure that valid documents containing technical defects or omissions in an acknowledgment form provide immediate constructive notice of an instrument when recorded in public records, as opposed to the one-year period in place under current law.

These provisions will enhance access to and increase the usability of remote online notarization across the state, as well as protect individuals from unintended difficulties should documents contain unintended technical notarial defects. These provisions are commonly contained in other state’s recording statutes; 35 states allow notaries to certify paper copies of electronic documents for recording purposes, while at least 17 states provide that documents containing technical defects or omissions provide immediate constructive notice upon recording.

Background on the use of online notarization in California. In order to prevent fraud and to ensure that the person signing important documents is who they claim to be, certain documents must be notarized. In order for a document to be notarized, a notary public must verify the identity of a signatory then affix the notarial seal to the document. Around the onset of the pandemic, and required social distancing, a legislative push began to enact a set of rules permitting and governing remote online notarization in California. That effort culminated in the passage of SB 696 in 2023. That bill established a broad framework to ensure that documents notarized remotely were secure, identification of signatories would be accurate, data would be properly retained, and a regulatory process for the licensure of notaries certified to perform remote notarizations by the Secretary of State.

Recognizing the complexities of online notarizations, SB 696 required the Secretary of State to complete the development of regulations regarding the process. That rulemaking may take until 2030. However, the text of SB 696 does permit the use of online notarization as soon as the rulemaking is complete, therefore any deficiencies in the law related to online notarization should be address as quickly as possible to ensure the smooth rollout of the technology in California.

Reflecting the improved accuracy of online notarization, this bill lowers the cure period for recorded property documents. Under existing law, a document effecting property is not entitled to be filed if it contains errors. Nonetheless, imperfect property-related documents are accepted by government officials all the time. For example, it is not entirely uncommon for a person purchasing a home, as well as the notary overseeing the signing of sales documents, to erroneously omit a signature in the lengthy series of documents that must be signed at closing. While many of these mistakes can be identified and remedied, sometimes they are not. Because these errors do not constitute fraud, California law deems such errors “cured” one year after the document was copied into government records.

One of the principal benefits of utilizing online notarial tools is the improved accuracy of the documents. For example, because a computer system is tracking the places in which the document is to be signed, the likelihood that a signature or initial is erroneously omitted from a document decreases dramatically. Accordingly, proponents of this measure are seeking to eliminate the cure period. While remote notarial tools do lessen the likelihood of such errors, until the technology is more widely utilized in this state, eliminating the cure period entirely seems premature. Accordingly, the author is proposing to amend this measure to adopt a 90-day cure period for documents impacting property. Thus, Civil Code Section 1207 will be amended to read as follows:

1207. Any instrument affecting the title to real property, ninety days immediately after the same has been copied into the proper book of record, kept in the office of any county recorder, imparts notice of its contents to subsequent purchasers and encumbrancers, notwithstanding any defect, omission, or informality in the execution of the instrument, or in the certificate of acknowledgment thereof, or the absence of any such certificate; but nothing herein affects the rights of purchasers or encumbrancers previous to the taking effect of this act. Duly certified copies of the record of any such instrument may be read in evidence with like effect as copies of an instrument duly acknowledged and recorded; provided, when such copying in the proper book of record occurred within five years prior to the trial of the action, it is first shown that the original instrument was genuine.

Despite the purported benefits of online notarization for rural Californians, ironically, this bill fixes a potential defect in existing law that would prohibit electronically notarized documents from being filed in rural counties. One of the leading arguments in favor of remote online notarization would be the increased opportunities for Californians living in rural areas, without a significant supply of notaries, to increase their access to notarial services. However, proponents of this bill now note that 13 of California’s 58 counties, ironically many of the very rural counties that might have received the most benefit of online notarial services, do not accept electronically filed documents. Seeking to ensure that consumers in these counties that utilize remote notarial services are not left unable to file their notarized documents, this bill provides for a process whereby the electronic document can be reprinted and accompanied by an attestation from a notary that the document is a valid reprint of the original electronic document.

Recognizing that, in some cases, the original notary may not be local, this bill permits any licensed notary to perform the certification. In practice, this would mean that a party would have to take their remotely notarized electronic version to a local notary who would then be able to print out the document and attest to its validity. Although this two-step process appears to significantly undermine the convenience of online notarization, similar processes are in place in 35 other states that permit online notarization.

Ongoing discussions over technical issues related to filing electronically notarized documents. As currently in print, this bill does not make certifying a printed copy of an electronically notarized document a mandated act that all notaries must perform. While understandable, given that the original notary may not be local and that local notaries may not wish to certify another person’s work, this provision causes logistical issues for consumer and potential legal issues for notaries. Indeed, while one could assume that most notaries would perform this service for an appropriate fee, there is no guarantee a consumer could find a notary to perform this act, thus leaving them with an otherwise useless electronically notarized document they cannot file with the government. Additionally, as noted by the California League of Independent Notaries in opposition to this measure, because the act is not an “official duty” of a notary their liability insurance would not cover the act. In response to these concerns, the supporters of this bill have suggested that several other states have adopted additional provisions to protect notaries and consumers. However, they seek more time to determine which approach would be best for stakeholders, including the Secretary of State, in California. Given that last year’s SB 696 was highly negotiated until the very end of the legislative session, the author is pledging to work with all stakeholders to find language that provides consumer’s protections and notaries’ the needed flexibility and legal protections to perform their jobs. Recognizing the complexity of these issues and the stakeholder’s prior willingness to find compromise, the Committee will monitor these discussions and reserves the right to recall the bill at a later time should these concerns not be properly addressed. Importantly, it should be noted that nothing in the bill in print, or as proposed to be amended, requires a notary to certify an electronic document if they do not feel comfortable doing so.

ARGUMENTS IN SUPPORT: A coalition of supporters, including but not limited to the California Land Title Association, the National Notary Association, and the California Association of Realtors write in support of this bill:

AB 2004 would modernize California’s recorded document laws by authorizing California notaries to certify paper copies of electronic documents – including documents notarized via remote online notarization (RON) – so that they may be recorded in California’s real property records and, separately, shorten the time at which recorded documents provide constructive notice if they contain a technical error.

Current law does not provide a mechanism to certify paper copies of electronic documents for recording purposes, leaving 22% of California counties unable to participate in RON. California law supports the use of electronic documents, electronic signatures, and electronic notarization. However, not all county recorder offices are equipped to accept electronic documents for recording purposes.

AB 2004 would resolve this by putting in place a simple certification process, in which a notary reviews an electronic document, ensures that it is still locked with a tamper-evident seal, prints the document, ensures that the document printed correctly, and completes the simple certification form. Certification would also be permissive, meaning that notaries would be perfectly within their rights to decline to certify should they so choose.

ARGUMENTS IN OPPOSITION: As noted, the California League of Independent Notaries is in opposition to the bill, unless amendments are taken to provide notaries with greater legal certainty when are verifying paper copies of electronic notarial acts. They write:

Notaries are entrusted with important responsibilities that directly impact legal transactions and documentation. However, without the designation of being an official duty under Section 8205, the proposed certification would not be protected by a notary’s bond or errors or omissions insurance. This exposes notaries to undue legal risks that could have severe consequences for their livelihoods.

In its current form, AB 2004 places notaries under felony liability with no protections of guidance. This not only undermines the integrity of notarial acts but also poses significant risk to the public. Therefore, we urge you to amend the bill to include adequate protections for notaries, clear guidelines for the certification process, and a defined fee structure.

REGISTERED SUPPORT / OPPOSITION:

Support

California Association of Realtors
California Credit Union League
California Escrow Association
California Land Title Association
California Mortgage Bankers Association
First American Financial Corporation
National Notary Association
Proof (formerly Notarize)

Opposition

California League of Independent Notaries (unless amended)

Analysis Prepared by: Nicholas Liedtke / JUD. / (916) 319-2334