As the COVID-19 pandemic impacts the ability of parties to get together to execute and acknowledge documents, and potentially closes the clerks’ and recorders’ offices where conveyance documents need to be recorded, parties may be looking for options to close transactions remotely.
Electronic Execution of Documents. Colorado has adopted the Uniform Electronic Transactions Act (the Act) pursuant to which electronic signatures may be used on transaction documents, provided the parties to the transaction have agreed to conduct the transaction by electronic means. The Act does not apply to the creation and execution of wills, codicils, or testamentary trusts or to certain transactions under the Uniform Commercial Code.
Electronic Acknowledgment/Notarization of Documents. The Uniform Electronic Transactions Act also allows for the electronic notarization or acknowledgment of signatures, effectively removing the stamp/seal requirements. However, all other requirements for a notarial act still apply, so any notarization will have to be done in the physical presence of a notary, as follows:
- The notary must appear in the room with the party whose signature is to be acknowledged.
- The notary must satisfy him/herself as to the identity of the party executing the document (e.g., see the party’s driver’s license) and swear to such identification.
Recording. Colorado clerks’ and recorders’ offices are authorized by statute to accept by electronic filing deeds and other documents. One popular facilitator of electronic recording, Simplifile, is accepted in all 64 counties in Colorado. Using it requires electronically uploading and submitting documents, which Sherman & Howard is set up to do. The county receives the documents electronically for processing, and they are stamped, officially recorded with the county, and put on public record. The electronic version of the recorded document and electronic recording data are returned to the submitter.
Recording of Electronic Signatures. Colorado statute authorizes the recording of deeds, powers of attorney, agreements, or other instruments in writing conveying, encumbering, or affecting the title to real property. While the authorization does not expressly require documents for recordation to be original, ink-signed documents, it has been interpreted by the Colorado clerks’ and recorders’ offices to impose such a requirement. Following suit, when a document is recorded electronically, Simplifile requires the submitter to represent and warrant that such individual is in possession of the original, ink-signed document.
Closure of Clerk and Recorder Offices. As of the date of this bulletin, many clerks’ and recorders’ offices in Colorado are closed for in-person recording. Some continue to process electronic recordings, such as Arapahoe, Boulder, Denver, and Douglas Counties. Others, such as Adams, Jefferson, and San Miguel, are not processing any recordings at all. The good news is that in order for a real estate document to be effective, it must be “delivered,” but recordation is not a condition to delivery having occurred. “Delivery” requires intent to pass a present interest in the property to the grantee. Pursuant to Colorado statute, the acknowledgment by a notary and recording of a real estate conveyance document create a rebuttable presumption that the conveyance document has been “delivered” and so is effective, even if the document is not actually recorded until some later date. Furthermore, the effective date of the conveyance relates back to the date of execution of the conveyance document, irrespective of whether such instrument is recorded after the date of execution and acknowledgment.
For any questions about this client advisory, please contact a member of the Real Estate Group.