In a recent survey of more than 200 organizations across several industries, McKinsey & Company found that more than 90 percent of executives said that they expect the fallout from COVID-19 to fundamentally change the way they do business over the next five years. About the same number of them also reported that the crisis will have a lasting impact on their customers’ needs.
McKinsey’s findings remind us that some of the best innovations we’ve seen in the past year have come from pressure created by crisis. Throughout the COVID-19 pandemic, companies have harnessed virtual capabilities to allow employees to work successfully from home. Conference calls today are no longer just voices on the phone but are virtual face-to-face interactions instead. Industry conferences have gone online, using virtual technology for presentations and networking. Even industries that have long held onto many of their traditional practices are feeling the pressure to leverage virtual opportunities that enhance business practices in the current environment.
Document Execution During the Pandemic
The real estate and title industries are among those reluctant to move away from those traditional practices. At the same time, challenges created by the pandemic have put a spotlight on the inefficiencies inherent in the real estate transaction process, including requiring in-person notarization. For example, executing real estate transaction documents typically requires parties to be physically present for a notary to confirm their identity and signature. What was once a relatively simple process, COVID-19 has complicated by introducing health and safety risks to in-person gatherings.
Because of these risks, companies have employed all sorts of creative strategies to continue to obtain “wet” signatures, going as far as providing “drive thru” closings where the signers never leave their cars.. Any in-person approach, even modified, carries with it pandemic-related health risks. On top of that, there are many logistical challenges to in-person notarizing, particularly in the timeshare segment that often involves international parties.
Benefits of RON
There’s a solution, though, that facilitates both safety and efficiency. Remote online notarization allows participants to produce notarized documents in a virtual setting using audiovisual conferencing to record the credentialing process and document execution. We’re seeing it embraced more and more because of quarantine and social distancing requirements.
Those who fear that a remote solution will open the door to fraud can be reassured when they learn that remote online notarization platforms offer a robust credentialing process on top of using the same safeguards as in-person notarization. With these protections in place, fraud in a remote notarization setting is no more likely to occur than with an in-person process.
In fact, the opposite is more likely to be true. A recorded session keeps responsible parties from denying documents were executed – a common claim among fraudsters – and makes it easier to identify irresponsible notaries. What’s more, important loan documents are transmitted securely and stored in protected e-vaults that add confidence and convenience to real estate transactions.
A Responsible Exit
In addition to the benefits that remote online notarization has for standard real estate closings, this capability presents a significant opportunity for the timeshare industry to further encourage timeshare owners to exit in a responsible manner. For example, when an owner decides not to keep their timeshare, they can deed their timeshare interest back to the developer.
This process involves executing documents that must be notarized. Developers that incorporate remote online notarization into their deed-back process can obtain all the parties’, witnesses’ and notaries’ signatures in convenient online sessions, or even a single session. This eliminates the need to send documents back and forth, a process that risks losing contact with owners. As a result, developers that use remote online notarization for the deed-back process are more likely to ensure that owners follow through with a responsible exit from their timeshare.
As the great innovator Steve Jobs said, “Innovation is the ability to see change as an opportunity, not a threat.” Nearly 40 states have enacted legislation authorizing remote online notarization. Challenges created by the global pandemic are likely to continue to create momentum for nationalizing this option in ways that generate wide acceptance among all parties. As that happens, the timeshare industry will benefit from secure, efficient, and effective transactions that aren’t delayed by geography or a global crisis.
This article originally appeared in the Fall 2021 issue of Developments magazine, found here.