Electronic Signatures and “Remote Notarization” in South Carolina
“Can’t we sign electronically?” is a question I am asked often when it comes to the execution of legal documents, especially since the COVID-19 outbreak and related recommendations to basically avoid as much human contact as possible. The short answer is: it depends on the document.
While many electronically signed documents may be valid and enforceable between the parties, there are certain transactions that require compliance with additional, specific formalities (for example, witness and notary signature requirements). The issue comes up most often in the context of real estate transactions.
South Carolina is a race-notice state (which is a topic for another day), hence the need to record documents like deeds and mortgages. South Carolina law requires recordable instruments to be executed in the presence of two witnesses and a notary, who must then also sign. Importantly, for documents that must be notarized, South Carolina law requires the person who is signing the document to be in the “in the physical presence” of the notary and for the notary to “sign by hand in ink.” (S.C. Code Ann. 26-1-5(c); S.C. Code Ann. 26-1-110). Currently, South Carolina law specifically prohibits electronic notarization.
Our state law also gives the county recording offices some latitude in determining what instruments they will accept or reject for recording, and the authority to develop their own policies and practices in addition to the state statutes. Many, if not all of them, require original, handwritten signatures on documents submitted for recording. (Please note, this topic is not to be confused with a separate topic – whether a document can be recorded electronically).
As it relates to real estate closings during the coronavirus pandemic, it is also worth noting the South Carolina Supreme Court recently issued an Order allowing South Carolina licensed attorneys to participate in and supervise a real estate closing (which we are required to do by law) by way of a video conference with the parties to the transaction (at least through August 1, 2020). But, the Order does not change the statutory “physical presence” and “ink” requirements for notarial acts. South Carolina law does not currently allow remote or electronic notarization (although legislation is currently pending to address this issue).
The take away, generally, is this:
South Carolina law does recognize the validity and enforceability of documents executed electronically by the parties – as between the parties. However, when it comes to documents that require witness(es) and/or notary signatures, and particularly those that must be recorded, you’ll still need to reach for your blue ink pen rather than your stylus.