BERLIN – As businesses across the state close or modify operations in the midst of a pandemic, an effort to allow remote transactions and settlements could keep the real estate industry afloat.
Last year, the Maryland General Assembly passed Senate Bill 678, which allows for Remote Online Notorization (RON). The electronic notary service permits a notary and signer, who are in different physical locations, to safely and securely execute electronic documents using two-way communication.
For the real estate industry, the use of RON could make it easier to complete transactions and conduct closings during the COVID-19 pandemic. In Maryland, however, the use of electronic notarizations does not go into effect until October 2020.
“Maryland introduced a bill last year that would allow for remote notary, but it doesn’t go into effect until Oct. 1 of this year,” said Joe Wilson, president of the Coastal Association of Realtors. “We are trying to get the effective date moved up so that we can start doing it immediately with the coronavirus issue going on.”
Sarah Rayne, government and public affairs director for the Coastal Association of Realtors, said the statewide association, Maryland Realtors, is currently reaching out to state elected officials to expedite that timeline.
And earlier this week, Maryland Realtor Sherman Hardy started an online petition to highlight the immediate need for electronic signatures and remote closings. As of Thursday morning, the petition had garnered nearly 18,500 signatures.
“The coronavirus impact has been far and wide reaching, the real estate industry while being a pivotal part of the economic industry it is often not at the forefront …,” Hardy wrote. “While we are understanding the gravity of the situation we cannot halt this industry.”
Wilson said documents are typically signed in person when closing on a real estate transaction. He noted, however, that the COVID-19 pandemic could threaten how transactions are done, if they are even done at all.
“For the most part people are moving forward,” he said. “But in some instances, where people are facing those economic challenges, we have seen some transactions fall apart. Another example is we do have a buyer who’s scheduled to close, and she has coronavirus. So in that instance an electronic notary would be helpful.”
Last week, the National Association of Realtors issued a letter to Congress seeking support for coronavirus response legislation that would pave the way for remote notarizations nationwide. President Vince Malta said the bipartisan bill – Securing and Enabling Commerce Using Remote and Electronic Notarization Act of 2020 (SECURE Notarization Act) – would provide immediate relief to homeowners and prospective buyers.
“While interest rates are at historic lows and demand exists in the purchase market, disruptions are near at hand due to the effects of COVID-19 on our communities and the economy,” he wrote. “Historically about 37% of home sales occur during the months from March to June, averaging over 1.8 million during that time. Congress needs to make all efforts to keep systems up and operational to prevent these transactions from being cancelled or interrupted.”
Wilson said RON allows citizens to complete real estate and loan transactions without gathering around a table. In turn, he said the real estate industry could continue to move forward.
“It’s a shame that we are a little behind the eight ball on this pandemic,” he said.
Wilson said it was still unclear how the pandemic would impact the local real estate market. Currently, all real estate brokerage offices are closed to the public. However, Governor Hogan’s executive order does not prohibit making appointments, meeting with a client or continuing to work on pending transactions, so long as they comply with group size, hygiene and social distancing practices.
“We are just trying to navigate this as best as we can,” he said. “This is new for everyone, it doesn’t matter what industry you’re in.”
Officials said the Coastal Association of Realtors would release a report on how COVID-19 is impacting the local market next week.