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 as it moves towards a world of remote online notarizations and fully online real estate closings. Thousands of homes have already been bought and sold online with the help of progressive underwriters and counties that are accepting electronic-recording, or eRecordings.
Until recently, you could only complete an end-to-end digital closing if your property was in an eRecording county. But as of January 1, 2020, a total of 10 states now have laws that allow recording entities, at their option, to record a true and complete paper printout of an electronic document.
How "Papering Out" Works
For counties that only record paper documents, papering-out involves submitting a certified paper printout of the electronic record. Ten states currently have laws in effect that allow for the papering-out of real estate documents: Florida, Idaho, Kentucky, Minnesota, Montana, North Dakota, Ohio, Oklahoma, Tennessee and Texas.
Each state has its own requirements for recording a paper printout of an electronic document. Each state’s rules specify:
- Who must supervise the printing out of the electronic document? For example, whether it must be a notary, attorney, escrow officer, or someone else;
- What kind of certification must be attached? For example, whether it is called a “Declaration of Authenticity” or a “Copy Certification; and
- The specific language and or contents of the certification.
Generally, any papering out process involves three steps:
- The right person in your office (usually a notary) will supervise the printing of the electronic document to be recorded. This printout should be the entire document, including any notarizations applied to the document by an electronic or remote notary.
- The notary would then attach his or her own Certificate stating that the printout is a true and accurate printout.
- The paper document with the new “Certification” is then submitted for recording.
A New Industry Standard?
In addition to these 10 states, three additional states have passed papering-out laws that will go into effect in 2020: Iowa (effective date of July 1, 2020), Maryland, and Washington (both with an effective date of October 1, 2020). More states are expected to follow suit.
As digital closing solutions grow in popularity, it’s important county recorders have the tools and means to handle a range of closing methods, whether the closing is in-person, hybrid or fully online. These papering-out laws will help county recorders meet changing consumer and industry preferences, allowing buyers and sellers across the country to close when and how they want.