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ALL ABOUT TITLE INSURANCE

What is title insurance?

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​Title insurance is your policy of protection against loss in the case that any problems could result in a claim against your ownership. Here is just a few samples:

• Forgery

• Heirs with prior claims

• Failure to discharge debt by prior owners

• Missing signatures

• Witnesses and notarization on deeds

• Incomplete or inconsistent corporate documents

• And this is just to name a few...

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Title Insurance protects owners and lenders against defects in the ownership of real property. “Title” is the collective ownership records of a piece of real estate; it consists of all transfers of real property rights, as well all loans that use the property as collateral. “Title” also means having the right to control and convey a piece of real property.

Florida Statute 624.608 defines title insurance, in part, as “Insurance of owners of real property or others having an interest in real property or contractual interest derived therefrom, or liens or encumbrances on real property, against loss by encumbrance, or defective titles, or invalidity, or adverse claim to title.”

If real estate has “clear title” (e.g. there are no known liens or encumbrances that will materially affect ownership and control of the property), it is free from ownership claims from outside parties and/or unpaid debts of previous owners. The purpose of a “title insurance policy” is to protect an owner, or mortgage lender, against losses arising from problems with title to the property that were unknown to you when you purchased or financed it (a title insurance policy is a prerequisite to obtaining a mortgage loan from an institutional lender to purchase real estate in Florida).

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What is title insurance in Florida?

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If a claim is made against your property in Florida, title insurance will, in accordance with the terms of your policy, assure you of a legal defense and pay all court costs and related fees. Also, if the claim proves valid, you’ll be reimbursed for your actual loss up to the face amount of the policy.

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Why do you need Title Insurance?

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When you buy real estate in Florida, you of course want to know that the person from whom you are purchasing the property actually owns it (e.g. holds marketable title to the property). You want to make sure that there aren’t other entities and/ or individuals, such as governmental bodies, contractors, lenders, judgment creditors or the Internal Revenue Service, with claims to the property/ improvements located on it. These “liens” are not extinguished when the property is transferred to you, even if you (or the Seller) are not aware of them. They remain with the land until they are satisfied and, as such, may restrict your use and enjoyment of the property and even cause you to lose ownership of your property.

A title insurance policy is an insurance policy that protects you from any of these adverse claims or conditions.

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How does Title Insurance work?

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Before issuing a title insurance policy, your title insurance agent will perform a title search of the public records to reveal any defects in the title and to identify all recorded encumbrances on the title to the property, such as unpaid property taxes, unsatisfied mortgages, judgments and tax liens against current or past owners, easements, encroachments, restrictions and court actions.

Any defects in title are reported to you and your lender prior to your purchase of the property in the title insurance commitment.  If there is a problem, a buyer should immediately direct the Seller to correct the defects (see your real estate contract) and terminate the contract if he/she fails to do so, or, alternatively, accept the contract subject to whatever defects are listed in the title commitment (which is not advisable to do).

If you take the property subject to its defects, you assume full responsibility for the fulfillment of all such claims as are known to you if the Seller defaults on them; your title insurance policy will not indemnify any losses resulting from these known liens.

But, as to any recorded claims of ownership about which you and the Seller are unaware, and which exist but were not discovered by your title insurance agent prior to the issuance of your policy, you are protected. In this case, the title insurance underwriter will defend in court against such claims; if it loses, it will compensate you for loss or damage up to the amount for which you have policy coverage.

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Title Insurance – The Basics

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When you are refinancing, or after you negotiate a contract for the purchase of real property, one of your next steps is to find a closing/title agent who will issue title insurance for your property. The purpose of title insurance is to eliminate risks of claims against the title to your property or the property that is being transferred to you. Because a standard title insurance policy serves only to protect against some potential losses and damages caused by problems relating to the ownership of the property, you should have, and a lender will require you to secure additional coverage. Your title insurance agent will provide such coverage by issuing endorsements to your title insurance policy.

2 Types of Title Insurance

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There are two types of title insurance in Florida: the Lender’s Policy and the Owner’s Policy. The Lender’s Policy protects the bank or mortgage company that lent you the money to purchase the home and the owners’ title insurance protects the homeowner from any of the issues mentioned above. Your closing agent will issue both policies once the transaction is closed.

An Owner’s Policy will cover up to the full amount you paid for the property and the mortgagee’s policy covers up to the full amount of the mortgage (sometimes more).

Title Insurance Endorsements

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Which Endorsements to Policy Coverage Do Lenders Commonly Require?

A standard title insurance policy does not cover everything – many things are left unprotected. So, if you apply for a loan to finance your purchase of property, your lender/ mortgagee will want more protection so it will require that you obtain endorsements to your standard title insurance policy.

The endorsements that Florida lenders most commonly require property owners to purchase are listed below (Note: the language of most endorsements are sometimes, but rarely, revised, so some of the protections mentioned below may be altered, modified or deleted):

• Restrictions, Easements, Minerals: Unimproved Land (Florida Endorsement Form 9.1): It protects unimproved land (i.e. land which has not been developed) against loss or damage sustained as a result of: (a) Present violations on the land of any enforceable covenants, conditions or restrictions; (b) notices of violation of covenants, conditions or restrictions on the land which, in addition, (i) establishes an easement on the land; (ii) provides for an option to purchase, a right of first refusal or the prior approval of a future purchaser or occupant; or (iii) provides a right of reentry, possibility of reverter or right of forfeiture because of violations on the land of any enforceable covenants, conditions or restrictions; (c) Any encroachment onto the land of existing improvements located on adjoining land; or (d) Any notices of violation of covenants, conditions and restrictions relating to environmental protection recorded or filed in the public records.  Under this endorsement, there is also some protection for damage to buildings constructed on the land after the policy date for the use of the surface of the land.

• Restrictions, Easements, Minerals: Improved Land (Florida Endorsement Form 9.2): It protects improved land as Form 9.1 protects unimproved land, but, also, it insures against loss resulting from damages to building on the land related to easements and other issues, including, but not limited to, a court order denying the right to maintain an existing building on the land because of any violation of a recorded restriction, covenant, or other related item, including those in a recorded plat for a subdivision or a court order requiring the removal from any land adjoining the land of any encroachment.

• Environmental Protection Lien Endorsement (Florida Endorsement Form 8.1): When a loan is secured by a mortgage on property that is used primarily for residential purposes, this endorsement provides the insured lender with protection against loss or damage sustained by reason of loss of priority of the lien of the insured mortgage over environmental protection liens recorded in the public records or created pursuant to a state statute.

• Variable Rate Mortgage Endorsement: It affords the insured lender protection against loss or damage sustained by reason of invalidity, loss of priority or unenforceability of the lien of the insured mortgage due to changes in the rate of interest (variable rate, convertible, renegotiable rate, adjustable rate or shared appreciation mortgages).

• Condominium Endorsement (Florida Endorsement Form 4.1): It insures that the condominium estate has been created in accordance with local laws, and, further, that there are no charges or assessments which are due and unpaid as of the policy date. This endorsement also protects against loss sustained due to (a) present violations of enforceable covenants, conditions and restrictions; (b) an obligation to remove any improvements to the property which are in existence on the policy date, because of present – or certain, unintentional future – encroachments on other units; and (c) failure of title by reason of a right of first refusal to purchase the unit which was or could have been exercised on the policy date.

• Planned Unit Development (PUD) Endorsement (Florida Endorsement Form 5.1): : It protects planned unit developments as the Condo Endorsement protects condominium units (see above).

WHAT DOES TITLE INSURANCE PROTECT? 

What Protections are Included in/ Excluded from Title Insurance Policies?

A title insurance policy is a one-owner item; its coverage extends only to the insured party listed on the policy (the owner and the mortgage company) and to those who succeed to the interest of the insured by operation of law (e.g. personal representatives, fiduciaries and heirs).

It protects you against loss due to title defects, liens, or other similar matters. Title insurance protects you from claims of ownership by other parties and against losses from problems that arose before you bought the property.

The title company will defend you in court if there is a claim against your property and will pay for covered losses.

A title insurance policy is NOT assignable to another purchaser. You should note, however, that policy coverage is perpetual as to the insured. So, if, ten years after you sell your property, it is found that you breached your contract with your Buyer because you conveyed defective title to the property (e.g. there was a forged deed in your chain of title), your insurer will be obligated to defend/ reimburse you as necessary – assuming, of course, that your policy provides sufficient coverage for the defect.

Here are a few examples:

• Improper execution of documents

• Mistakes in recording or indexing legal documents

• Forgeries and fraud

• Undisclosed or missing heirs

• Unpaid taxes and assessments

• Unpaid judgments and liens

• Unreleased mortgages

• Mental incompetence of grantors on the deed

• Impersonation of the true owners of the land by fraudulent persons

• Refusal of a potential purchaser to accept title based on the condition of the title

How will a Title Insurance Policy protect you?

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A standard title insurance policy is likely to protect against common risks that can threaten your use and enjoyment of real property. Be very careful to review the terms of your policy to ensure that you are adequately protected. But generally, your owner’s title insurance policy will require your insurer to defend your title in court and pay for actual loss up to the policy maximum under the following circumstances:

• A lien is filed against your title because a previous owner failed to pay a mortgage, taxes, judgment, special assessment or homeowners/ condominium association fee;

• There are leases, contracts or options on your land that weren’t recorded in the public records or disclosed to you;

• You lack a right of access to and from your property;

• A deed in your chain of title is invalid because somewhere along the way, a notary public or other official improperly signed, recorded or delivered a deed; and

• A deed or other document in your chain of title is invalid as a result of forgery, fraud against the rightful owner, a signature given under force or a signature given by a person legally incompetent to sign or claiming to be someone else.

What protections are NOT included in a standard title insurance policy?

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Absent endorsements to the contrary, a standard title insurance policy will NOT protect you against title defects – unrecorded or recorded, and regardless of when sustained – about which you knew or which you allowed to occur. Also, it will NOT cover problems with your title that occur after the date on which you purchase the policy. Further, your title insurance policy will NOT protect you from UNRECORDED claims against the title to your property. Your insurer is also NOT likely to protect you against loss or damage suffered by reason of:

• Violations of building and zoning ordinances and other laws and regulations related to land use, land improvements, land division and environmental protections;

• Any restrictive covenants that limit how you may use your property and/ or state how buildings are to be constructed on it; these are contained in the policy itself;

• Losses resulting from rights claimed by renters or others occupying the land;

• Condemned land, unless a condemnation notice appeared in the public record on the policy date, or the condemnation occurred before the policy date;

• Your spouse’s homestead, community property or survivorship rights to the property;

• Whatever title irregularities arise from a deceased person’s estate, a bankruptcy estate or a trust;

• Claims of others who may have certain rights if your property is near a body of water, or if it has a river or stream flowing through it (there is an endorsement related to this issue); or

• Taxes for the year of the effective date of the policy, as well as subsequent taxes and assessments by taxing authorities for prior years due to change in land usage or ownership (i.e. where tax exemptions claimed by previous owners result in more taxes being assessed against your property in the future).

Which Laws/ Rules Govern Title Insurance in Florida?

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In Florida, the title insurance industry is regulated largely under Title XXXVII of the Florida Statutes. Chapters 624 and 626 defines title insurance and provides general requirements for the authorization of title insurance underwriters/ agents and administrative oversight of the industry, which responsibility falls to the “Office of Insurance Regulation”. Chapter 627 contemplates the minimum rate a title insurance company must charge and the minimum protection it must offer when issuing a title insurance policy; among other things, it prohibits an insurer from writing certain exceptions/ exclusions to coverage into any given policy.

In the Florida Administrative Code, the Office of Insurance Regulation sets specific guidelines for the various steps in the process of issuing a title insurance policy. For example, Chapter 690-186 discloses the standard according to which your title insurance premium is to be calculated.

How much does Title Insurance Cost in Florida?

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The cost of title insurance in Miami-Dade, Broward County and other South Florida counties varies based on the purchase price of the property. Unlike other insurance premiums, which must be paid annually, a title insurance premium is paid one time only at settlement. Florida’s title insurance premium is based on a promulgated rate calculation, which is determined by the state of Florida.

Florida’s title insurance premium is also determined based on the purchase price as follows:

• Purchase Prices up to $100,000: $5.75 per thousand

• Purchase Prices Over $100,000: $5.00 per thousand

So, for example, a property worth $100,000 would have a title insurance fee of $575, while a $200,000 piece of property would have a $1,075 title insurance cost.

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TITLE INSURANCE RATES

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What are the Current Title Insurance Issue and Re-Issue Rates? When am I entitled to a Discount?

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The Office of Insurance Regulation sets rates for title insurance premiums, called the “promulgated rate”; title insurance agents charge at least the minimum promulgated rate when issuing title insurance policies. To determine the promulgated rate, the Office takes into account underlying risks and, further, the various costs associated with underwriters’ issuance of title insurance policies (i.e. administrative surcharges, annual licensing fees and taxes paid to the state on the gross amount of premiums sold). The “regular title insurance premium” that is charged to you consists of the promulgated rate, as well as charges for related title services (e.g. preparing title information and other documents and conducting the closing for the real estate transaction, in which the title insurance binder, commitment or policy is issued).

The Office has required that your title insurance agent break the regular title insurance premium down into its constituent parts (promulgated rate, title search charges, examination fees and closing charges) on your disclosure documents. The Office hopes that you will thus be better informed as to the cost of title insurance, and, further, that it will be better able to monitor practices within the industry to ensure that title insurance agents and underwriters are not compromising the promulgated rate.

In Florida, your promulgated rate is calculated primarily in accordance with your property’s insurable value. If you obtain a title insurance policy pursuant to your purchase of property, the rate is determined by the purchase price of the property. If, however, a title insurance policy was recently taken out on your property – or if you obtain the policy pursuant to a mortgage refinance, which refers to the process of replacing your existing debt obligation with another bearing different terms – you may be entitled to a discounted “reissue rate”.

(Remember, however, that a non-lawyer title insurance agent is not obligated to acknowledge your qualification for this reissue rate/ credit, while a title insurance attorney will owe you a fiduciary duty to fully disclose this and other such benefits.)

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Florida Title Insurance Premium Calculation

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To calculate the promulgated rate for your owner’s title insurance premium, which is the absolute minimum that your title insurance underwriter can charge you if you do not qualify for a reissue credit as noted above, use the following table:

Purchase Price > Title Insurance Cost Per Thousand $

$0 – $100,000 > $5.75

$100,000 – $1 million > add $5.00

$1 million – $5 million > add $2.50

$5 million – $10 million > add $2.25

Over $10 million > add $2.00

To calculate the promulgated rate for the reissuance of an owner’s title insurance policy, which is the absolute minimum that your title insurance underwriter can charge you if you qualify for a reissue credit as noted above, use the following table:

Purchase Price > Title Insurance Cost Per Thousand $

$0 – $100,000 > $3.30

$100,000 – $1 million > add $3.00

$1 million – $10 million > add $2.00

Over $10 million > add $1.50

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Hypothetical: Say you have contracted to purchase a home for $110,000.00. To calculate the promulgated rate for your property’s basic title insurance premium, you would use the first table listed above and engage in the following two steps: (1) Multiply $5.75 by 100 to arrive at the rate to be charged for the first $100,000.00 of your property’s value, for a total of $575.00. (2) Multiply $5.00 by 10 to arrive at the rate to be charged for the remaining $10,000.00 of your property’s value, for a total of $50.00. Add both values to determine the promulgated rate for your property’s basic title insurance premium, which comes to $625.00. Note: If you are obtaining title insurance pursuant to, for example, an attempt to refinance a mortgage on your property, and you meet the remaining requirements for a reissue credit, you would use the second table listed above, and engage in the aforementioned two steps to arrive at the promulgated rate for your property’s “reissue” title insurance premium.

Remember, however, that the promulgated rate is generally the rate your title insurance underwriter will charge you to insure the title to your property. The promulgated rate is only ONE component of the regular title insurance premium you will pay for your title insurance policy. Which additional fees will apply will depend on the underwriter and title agent you select.

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When does a homebuyer qualify for a Reissue Credit?

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Simply stated, a homebuyer will qualify for a reissue credit if he/she is obtaining a title insurance policy for property for which a title insurance policy was only recently purchased and which has not since been improved (i.e. undergone construction, etc.).

To be more specific, however, the following criteria must be met to qualify for a reissue credit:

FIRST, an owner’s title insurance policy for the property must have been issued previously to insure either the seller or the borrower in the current transaction; and

SECOND, the property must not have been improved since the original policy date, except for roads, bridges, drainage facilities or utilities; or, the original policy date must be less than three years prior to the reissue date; or, the new policy must be a mortgagee’s policy issued upon the refinancing of property for which the current mortgagor had previously obtained an owner’s policy.

Title Insurance Reissue Rates

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The Florida Administrative Code sets the premium for title insurance policies issued within 3 years of a previous policy (for sales/purchase) at:

$0 – $100,000 > $3.30

$100,000 – $1 million > add $3.00

$1 million – $10 million > add $2.00

Over $10 million > add $1.50

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In order to qualify for these rates, the title agent must include proof of the previous title insurance policy. Failure to include the proof of prior coverage within 3 years could result in the title insurance agent and agency being found to have violated Subsection 627.780(1), Florida Statutes, for quoting, charging, collecting or accepting a premium for title insurance that is other than the premium implemented by the Florida Administrative Code.

For a refinance the policy never expires for a discount.

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Substitution Loan Rates

The following risk premium for substitution loans shall apply:

(a) When the same borrower and the same lender make a substitution loan on the same property, the title to which was insured by an insurer in connection with the original loan.

Age of Original Loan Premium Rates

3 years or under >> 30% of original rates

From 3 to 4 years >> 40% of original rates

From 4 to 5 years >> 50% of original rates

From 5 to 10 years >> 60% of original rates

Over 10 years >> 100% of original rates

Minimum premium is $100.00

(b) At the time a substitution loan is made, the unpaid principal balance of the previous loan will be considered the amount of insurance in force on which the foregoing rates shall be calculated. To these rates shall be added the regular rates in the applicable schedules for any new insurance, that is, the difference between the unpaid principal balance of the original loan and the amount of the new loan.

(c) In the case of a substitution loan of $250,000 or more, when the same borrower and any lender make a substitution loan on the same property, the title to which was insured by an insurer in connection with the previous loan, the premium for such substitution loans shall be the rates as set forth in paragraphs (a) and (b).

​Who pays for title insurance at closing in Florida?

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In Florida, the person responsible for paying title varies per county and can be negotiated in the contract. In most counties, the seller generally pays for the title insurance and chooses the title company.

However, the buyer generally pays for title insurance and chooses the title company in the following counties:

• Sarasota County

• Collier County

• Miami-Dade County

• Broward County

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Who chooses the title company in Florida?

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Most buyers and sellers are indifferent about title insurance companies, while many real estate agents or lenders have an existing relationship with a specific title company they prefer to work with. What many homebuyers don't realize is that the title insurance company they work with can have a huge impact on their closing experience!

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Choosing the right title insurance company like PRONTO TITLES can lead to:

• A stress-free closing experience

• Closing on-time without delays

• Not having any title issues after closing

• More affordable title insurance and closing costs

• Peace of mind that your home will be secure for years to come

• And much more...

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Who has the right to make the ultimate choice?

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The person responsible for choosing the title insurance company is typically the person who pays for the Owner’s Title Insurance Policy (read above). That said, the party not paying for the Owner’s Title Insurance Policy can make a counteroffer that includes a new proposed title company if they’re passionate about using a specific closing firm.

Since the seller customarily pays for the new Owner’s Title Insurance Policy in many counties in Florida, it should give them the right to select the title company. The only caveat would be that, in this case, a buyer would be forced to use the title company the seller chooses, and that title company may not provide good customer service or "closing experience." In Miami-Dade, Broward, Sarasota and Collier counties, where the buyer customarily pays for and chooses the title insurance company, this may not be an issue.

TITLE TRANSFERS

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Is Title Insurance transferable?

No. Title insurance is never transferable when the ownership of property changes, and it similarly can’t be assumed by a new owner. In fact, a title insurance policy itself terminates when the legal title on property changes.

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How do you transfer a Title-Deed in Florida?

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Transferring a title in Florida is quite simple assuming the title is unencumbered, meaning there are no competing claims or liens on the property. In these cases, a simple Quitclaim Deed could be used to transfer the title of the property to the new owner.

Although a Quitclaim Deed can be a quick solution, a Warranty Deed and Title Insurance are always recommended due to Florida having so many probates, unauthorized title transfers and title fraud.

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What is the cost of Title-Deed transfer in Florida?

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The fees related to title transfer in Florida are actually called “documentary tax stamp rates,” and they’re included in closing costs — typically paid by the seller, though this is negotiable. The documentary tax stamp rates are uniform throughout the state with one exception: Miami-Dade County.

The tax in most Florida counties is $0.70 for every $100 of the home’s purchase price, which is also known as the deed’s consideration. In Miami-Dade, that rate drops to $0.60 per $100. For example, if you purchase a home through most of Florida for $250,000, the documentary tax stamp rates will be $1750. If you purchase a home in Miami-Dade for the same price, the documentary tax stamp rates will be $1500.

ONLINE REMOTE CLOSING IS FINALLY HERE !!!

As a company committed to providing the best service in the industry, PRONTO TITLES is happy to offer a new powerful tool to enhance your purchase, sale or refinance experience: Online Closings via "RON" (Remote Online Notarization)

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“People shouldn’t have to risk their health or safety to execute important financial or legal documents, especially when they could do so from the safety of their own home. The SECURE Notarization Act brings the notary process into the 21st century, allowing people to securely complete documents while still following recommended health and social practices amid the coronavirus pandemic.”

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Introduction

1. What is RON?

Answer: It is an acronym for remote online notarization. RON is the means used to electronically notarize a document using a third-party (i.e. vendor) software platform which records the visual and audio communications of participants to the signing of a document even when the participants are not physically located in the same place. The practice was authorized in Florida on Jan. 1, 2020.

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2. How does RON differ from “electronic notarization?”

Answer: Electronic notarization, first authorized in Florida in 2007, allows for the notarization of electronic documents by a notary public using an electronic signature and applying an electronic seal. Unlike RON, the principal must be in the same location as the notary public, the computer or other electronic device need not be connected to the internet, and there is no requirement that the notarization procedure be recorded. Also, unlike RON, the notary need not maintain an activity journal and identity is confirmed by the notary through personal knowledge or presentation of a valid form of identification. Electronic notarization is governed by Sec. 117.021, F.S.

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3. Can a duly commissioned Florida notary public perform RON?

Answer: A Florida notary public may not perform a RON prior to registering as an “online notary public” with the Florida Department of State in accordance with the requirements of Chapter 117, F.S. and Rule 1N-7, F.A.C. Registration includes the payment of an additional fee, certification as to completing a 2-hour instructional course, evidence of additional insurance and bond coverage, and designation of a qualified RON vendor.

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Complying with the Law

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1. Can a Florida online notary public notarize the signature of someone signing outside the State of Florida?

Answer: Yes. Pursuant to Sec. 117.265(1), F.S., an online notary public physically located in this state may perform an online notarization regardless of whether the principal or any witnesses are physically located in this state at the time of the online notarization. Note, however, that Sec. 117.285(4), F.S., requires that a witness remote from the principal must verbally confirm on the recording that he or she is a resident of the United States and physically located within the United States or a territory of the United States at the time of witnessing.

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2. Does the notary block need to be updated for all notarized documents in Florida, or only those for the transfer of real estate/closings?

Answer: All notarized documents. Sec. 117.05, F.S. now requires a notary public to include, among other things, the following information when completing a jurat or certificate of acknowledgment: “Whether the signer personally appeared before the notary public at the time of the notarization by physical presence or by means of audio-video communication technology.” Under Sec. 117.01(4)(h) an intentional violation of the statute can result in the suspension of a notary public.

From a practical standpoint a notarization which fails to include this element risks being rejected for recording by the clerk and makes the document subject to challenge when enforcement is sought. In addition, Sec. 117.05(6), F.S. makes the employer of a notary public liable to all persons involved for damages proximately caused by a notary’s misconduct.

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3. Will a current notary public certificate be invalid if he doesn't obtain a RON certification? Answer: No. A Florida notary public does not have to become an “online notary public.” RON certification simply expands the authority of an appointed notary public to include remote online notarization.

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4. May the signatures of foreign nationals be notarized remotely or is it only available to U.S. citizens?

Answer: Although the RON law allows for the notarization of foreign nationals, the identity verification process for those individuals is currently problematic because of the “knowledge-based authentication (KBA)” and credential analysis requirements of the statute. All signers must present a form of identification subject to verification and current technology cannot verify foreign passports. The principal must also go through KBA, which currently requires a U.S. tax identification number and U.S. credit history. It may therefore be difficult to qualify foreign nationals for RON until sometime in the future.

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5. If the signer is personally known to the RON notary, may the KBA process be skipped to allow for the remote notarization of a foreign national?

Answer: Apparently not. Unfortunately, RON platform providers so far seem to be requiring the KBA process in all cases, even for U.S. citizens.

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6. Does Title Agency or Closing Agent, need to get the original signatures post-signing or is the digitally-signed version sufficient?

Answer: Under the law, the digital signature is the original signature. A copy of the signed document may be printed and certified to be a true and correct copy, but it is still just a copy.

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7. Can the notary also serve as a witness?

Answer: Yes, but the notary must sign both as the notary and again separately as a witness just as has always been the case. See TN 10.07.04.

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8. Who is required to store the RON recording for 10 years?

Answer: The notary is responsible for maintaining the recordings as well as the required electronic journal for a period of 10 years after the date of the notarial act. However, Sec. 117.245(4), F.S. allows the notary to delegate that responsibility by contract to a secure repository provided the Department of State is notified of the delegation within 30 days. (Note: the rules are slightly different for electronic will signings as the recording must be maintained by a “qualified custodian” in accordance with chapters 731 and 732, F.S.).

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9. Is a digitally signed note acceptable to a lender? Can an electronic note be the basis of a foreclosure action?

Answer: Yes, that has been the case since the advent of electronic notarization in Florida. See Rivera v. Wells Fargo Bank, N.A., 189 So.3d 323 (Fla 4th DCA 2016).

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10. What if an instrument is notarized by an online notary from another state?

Answer: Most Title Insurance Companies will insure transactions involving Florida property where the instrument(s) to be insured or any deed in the back chain were acknowledged by either a Florida or other state RON if the principal is a U.S. citizen. Due to the higher risk and potential for fraud, we must contact underwriting to discuss the circumstances prior to insuring any transaction which utilizes RON for a non-US citizen or other person without a U.S. social security number.

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Procedures

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1. What if the loan documents prepared by the mortgage lender do not have the new notarial certificate?

Answer: Coordinate with the lender as you would if the certificate lacked the name of a spouse needing to sign to satisfy Florida’s homestead joinder requirements. They may send you a revised document, allow you to handwrite the change, or agree with your suggestion to add a separate notarial certificate page you will prepare and attach. Do not insure a transaction lacking a valid certificate without first discussing it with Fund underwriting counsel.

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2. Does the RON Notary needs a separate E&O policy? 

Answer: The statute (Sec. 117.225(7), F.S.) simply requires an online notary public to provide evidence of coverage satisfactory to the Department of State. You may wish to check coverage under your firm’s overall policy, but a standalone policy, which is not cost prohibitive, will likely best meet this requirement.

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3. What notarial certificate do we use for a notarization by a consul or embassy?

Answer: Since the statute only establishes the requirements to be followed by a Florida notary public nothing has changed insofar as notarization in a foreign country. 

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4. Will the recorder's office be able to verify the e-notarized document is legitimate, or fraudulent?

Answer: It is not the responsibility of the recorder to determine if a document is fraudulent. As for the legitimacy of an electronic document, the Uniform Real Property Electronic Recording Act (Sec. 695.27, F.S.) establishes the standards that will guide a recorder in determining the document’s legitimacy and entitlement to recording.

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5. If we receive documents that have been RON notarized, what do we look for to verify if they are valid?

Answer: In addition to the elements you review on notarized paper documents, examining the seal to determine if it was a proper notarization is a little different. Relevant information about the seal can be viewed when the computer cursor hovers over the electronic seal. You must see the full name of the notary public, the words “Notary Public State of Florida”, the expiration date of the notary’s commission, and the notary public’s commission number (Sec. 117.021(3), F.S.). Do not be concerned if other matters appear such as “signature not verified” as this is not important for your purposes in confirming validity.

Finally, if notarized remotely by a Florida online notary, there must also be a notation on the document in or adjacent to the seal that it was an online notarization (e.g. “online notary”) per Sec. 117.265(7), F.S.

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6. Are estate planning documents, e.g. POA, Affidavit of No FL Estate Tax Due (DR-312), required to reflect the new notarial certificates as of Jan. 1, 2020?

Answer: Yes. Although the state-issued forms may not be updated right away, it is up to the notary to conform all non-compliant affidavits before notarization.

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7. Can a signer be compelled to use RON?

Answer: No. The principal must voluntarily agree to utilize remote online notarization.

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8. Does the Title Agency need to obtain lender approval if the borrower wishes to sign the loan documents remotely via RON?

Answer: Check the written loan closing instructions and contact the lender for approval to close digitally and utilize RON.

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RON Service Providers

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1. If the signer fails the credential verification process, can they retry that same day?

Answer: Sec. 117.295(3)(a) allows for the offering of one additional attempt in the event of a failed attempt. Since the statute does not require the offering of an additional attempt on the same day you should check with your vendor to determine their policy.

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2. Can an online notary avoid the use and costs of a RON servicer vendor and notarize an instrument using FaceTime?

Answer: No. An online notary must identify and use a RON service provider whose audio-video communication technology and processes they will use. (Sec. 117.225(5), F.S.)

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3. Can the witness and the notary be in the same location and share a screen?

Answer: The witness and notary can be on the same screen as long as the witness and principal can see and hear each other, and the witness hears the principal make a statement to the effect the principal has signed the electronic record (See 117.285(3), F.S.).

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4. Does the RON service provider keep a copy of the audio-video recording so that it can be accessed in the future, if necessary?

Answer: Under the statute, the RON service provider is not required to do so. The online notary public is required to provide access to the recording to the parties; the title agent, settlement agent, or title insurer who insured the electronic record or hired the notary public; the RON service provider; the qualified custodian of an electronic will; any person asked to accept a POA notarized by the online notary; the Department of State; and any other persons pursuant to subpoena, court order, law enforcement investigation, or other lawful inspection demand (Sec. 117.255(5), F.S.).

The online notary public can delegate their responsibility by contract to a secure repository provided the Department of State is notified of the delegation within 30 days (Sec. 117.245(4), F.S.). The RON service provider you use may not necessarily be the secure repository, so you should determine their policy at the time you enter into an agreement with them.

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5. Do you need the IDs of the witnesses to ensure they're disinterested parties?

Answer: No. The IDs are for the purpose of verifying the identity and confirming the U.S. residency of a witness who is not physically present with the principal. If appearing with the principal, no ID is needed; the witness need only announce his or her name and current address for purposes of the recording (Sec. 117.285, F.S.). Disinterest of a witness must be separately determined.

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6. Will the RON service providers allow the closer or title agent to be part of or oversee the signing process?

Answer: In cases where the closer or title agent is not the online notary, some RON service providers will allow the closer or title agent to attend the signing session as an observer. Check with the RON service provider to determine the level of access afforded to an observer.

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7. Are there RON service providers that provide an online notary “on demand”?

Answer: Yes. Some RON service providers will provide online notarial services on demand.

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Itemization of RON-related fees

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1. Can the charges related to the execution of documents through a RON service provider’s platform be separately itemized on the closing statement and/or CD? 

Answer: Generally the answer to this question is “yes” because the remote signing of closing documents would be at the specific request of the buyer or the seller. Here is a statement from the Department of Financial Services website on this topic:

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Title agencies are permitted to charge the third-party fees as separate line items as long as the consumer has been notified these fees represent responsibilities of the agency, which were contracted to a third party. The consumer must also understand these fees will be charged to them either as part of the closing services fee total, or in addition to the agency's closing services fee. However, in no case should a third-party fee be charged to a consumer in a deceptive or misleading manner.