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Colorado lawmakers stress data privacy in new virtual notarization law

On Behalf of | Sep 1, 2020 | Fiduciaries, Trustees |

Since March, when Americans started taking safety precautions to prevent the spread of the coronavirus, many business and personal interactions have moved online to minimize face-to-face contact. Many states – including Colorado – reacted by issuing emergency rules to allow remote online notarization (RON).

Role of a notary

A notary is someone whom the state of Colorado has commissioned to perform the official act of being a neutral witness. Notarization of a document of legal significance is the routine requirement of having a notary present when another person signs the document.

By signing and applying their official stamp to the document, the notary certifies that the person signing is doing so willingly and that the signature is that of the person it identifies them to be. The notary must review the person’s government-issued identification card to satisfy themselves of the person’s identity.

Examples of the kinds of documents requiring notarization include some (but not all) documents within these categories: real estate transaction documents, affidavits, estate planning documents, banking documents, retirement account beneficiary designations and others. Even if Colorado law does not require notarization, it can be a good idea to have some important documents notarized anyway as evidence of valid signing and execution.

Remote online notarization comes to Colorado

Because notarization is so frequently required in the course of business and in personal transactions, and because, by definition, it requires at least two people to be in the same room, it makes sense that it would be scrutinized in the time of COVID-19, necessitating alternatives to the traditional face-to-face practice. In Colorado, Gov. Jared Polis signed an executive order on March 28 in which he temporarily allowed remote notarization in Colorado to mitigate the coronavirus.

He authorized the secretary of state to issue temporary emergency rules for remote online notarization, which Sec. Jena Griswold did on March 30, set at that time to expire on June 28.

Colorado legislature steps up

Even before the coronavirus, state legislators had been debating bills about remote notarization for several years. According to Colorado Politics, they disagreed about the level of data privacy protections that they should require. Many notarized documents contain personal information like Social Security numbers or financial account numbers, for example.

The Colorado Senate passed Senate Bill 20-096 before the Colorado General Assembly session ended on March 14, but the House still needed to act on it for it to become law. When the Assembly reconvened on May 27, the Senate and House agreed to amendments and passed the Remote Notaries Protect Privacy bill, which allows remote notarization as an option for Colorado notaries via audio-visual communication.

The governor signed it, and the bill took effect on June 26. It requires the secretary of state’s temporary rules governing remote notarization to stay in effect until Dec. 31, 2020, with the new law’s main requirements taking effect Jan. 1, 2021. (On June 26, the day the new law took effect, the secretary of state readopted the temporary rules so that, instead of expiring on June 28, they would continue to remain in effect through the end of the year, after which, starting Jan. 1, 2021, the new law’s provisions will govern remote notarization procedures.)

Mortgage News Daily wrote that the Colorado law “includes data privacy protections for remote notarial acts that are more stringent than similar bills passed in other states.” For example, the Colorado law prohibits recordings of the content of the notarized documents and prevents the sale of private data contained in those documents to third parties.