Turning Every County into an E-Recording County: What You Need to Know About “Papering Out” and Recording Electronic Records
The entire real estate industry has seen a massive shift in excitement to move towards a world of remote online notarizations, and fully online real estate closings. As of today, thousands of homes have already been bought and sold online, with the help of progressive underwriters and e-recording counties.
Up until recently, you could only close on a home fully online if your property was in a county which had fully implemented e-recording.
But as of September 1, 2019, every county in TX is now able to record a document from a fully online closing, , thanks to SB 2128.
The bill expressly amends Section 12.0013 of Texas’ Property Code to permit a certified paper printout of an electronic record to be recorded by a county which only records documents in paper format. This means that when a recordable instrument is e-signed and e-notarized (including remotely e-notarized), it can be printed out and recorded by the county recorder, in paper form.
This allows transactions to be completed fully online (e-signed and remotely e-notarized) for ANY county in Texas REGARDLESS of whether the county is an e-recording county or still only records in paper. If the county e-records, it can accept the electronic record directly. If it’s a county which only records paper instruments, it can record a certified paper printout of the electronic record.
How it Works in Texas
In order to accomplish this “papering out” to record an electronic record in a paper-only county, a traditional notary will print out the recordable instrument AND will attach a DECLARATION OF AUTHENTICITY OF PRINTED/TANGIBLE COPY OF ELECTRONIC RECORD.
Just as with other traditional copy certifications, the notary will print out the electronic record to be paper-recorded, and then will fill out and sign the Declaration of Authenticity in pen and ink, and will notarize it using his or her traditional rubber seal.
The process of printing out an electronic record, and having a traditional notary Certify the printout as true and correct, will be the responsibility of the Title Agent in the transaction. The title agent will then send the papered-out instrument to the County to be paper-recorded through their normal paper-recording processes.
See a sample of a Declaration of Authenticity which a traditional notary can use to certify a printout in accordance with the Texas statute, here.
A New Industry Standard?
Texas is the first state to pass a bill to permit a certified paper printout of an electronic record to be recorded by a county which only records documents in paper format. But eleven others now have similar laws already in effect or going into effect soon. More will soon follow. These will break open the opportunity for fully online closings in every county in these states, regardless of when they choose to fully implement e-recording. This will empower buyers and sellers who want to have access to this convenient technology to close whenever, and however they want.