Report Title:

Uniform Real Property Electronic Recording Act

 

Description:

Permits the registrar of the bureau of conveyances to accept electronic documents with electronic signatures for recording. Requires the judiciary to study what effect electronic recording may have on the adjudication of land court applications, determine permissible uses for electronic recording, and report its findings to the legislature prior to 2009 regular session. (HB2302 HD1)

 


HOUSE OF REPRESENTATIVES

H.B. NO.

2302

TWENTY-FOURTH LEGISLATURE, 2008

H.D. 1

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT


 

 

RELATING TO REAL PROPERTY.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


SECTION 1. The legislature finds that electronic communications make it possible to conduct transactions in new forms. Some of the earliest transactions governed by law are real estate transactions. Deeds, mortgages, and leases were memorialized by words on paper with manual signatures. However, technology has advanced and electronic communications are increasingly replacing paper documents. The law of real property will need to transition to accommodate this change. The efficiency of real estate markets make this imminently necessary.

The Uniform Electronic Transactions Act, as codified under section 489E-5, Hawaii Revised Statutes, adjusted statute of fraud provisions to enable electronic records and signatures for the memorializing of a multitude of transactions, including basic real estate transactions. The widespread enactment of the Uniform Electronic Transactions Act and the federal Electronic Signatures in Global and National Commerce Act made it possible to treat sales contracts, mortgage instruments, and promissory notes that are memorialized in electronic form, and with electronic signatures, equal to the same paper documents that have manual signatures. However, real estate documents must be recorded on public record to be effective. This Act permits the registrar of the bureau of conveyances to accept electronic documents with electronic signatures for recording.

This Act is not intended to affect land court registration pursuant to chapter 501, Hawaii Revised Statutes, except to permit the registrar of the bureau of conveyances to accept, make, keep, enter, file, index, store, archive, or convert any document received by the registrar of the bureau of conveyances, or filed at the bureau of conveyances, by the registrar of the land court. The land court is an adjudicating body with rules regarding the processing of land court documents and instruments. Special consideration should be given to what effect electronic recording may have on the adjudication of land court applications.

The purpose of this Act is to:

(1) Permit the registrar of the bureau of conveyances to accept electronic documents with electronic signatures for recording; and

(2) Require the judiciary to study what effect electronic recording may have on the adjudication of land court applications, and permissible uses for electronic recording, under chapter 501, Hawaii Revised Statutes.

SECTION 2. Chapter 502, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"PART XII. uniform real property electronic recording aCT

502-A Definitions. As used in this part:

"Document" means information affecting title to real property that is eligible to be entered into the public records, including any plan of land prepared pursuant to section 502‑17.

"Electronic" means relating to technology having electronic, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.

"Electronic document" means a document that is stored in an electronic medium.

"Electronic signature" means an electronic sound, symbol, or process attached to or logically associated with a document and executed or adopted by a person with the intent of affixing a signature on the document.

"Paper document" means a document that is inscribed on a tangible medium such as paper.

"Person" means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, public corporation, government, or governmental subdivision, agency, or instrumentality, or any other legal or commercial entity.

"State" means a state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States.

502‑B Electronic document and electronic signature; validity. (a) The registrar may accept an electronic document for recording. The electronic document shall be exempt from any requirement under this chapter that a document or instrument be:

(1) Original;

(2) On paper, cloth, or other tangible medium; or

(3) In writing.

(b) When a law requires as a condition for recording, that a document be signed, the requirement is satisfied by an electronic signature.

(c) Any requirement that a document or a signature associated with a document be notarized, acknowledged, verified, witnessed, or made under oath shall be satisfied if the electronic signature of the person authorized to perform that act, and all other information required to be included, is attached to or logically associated with the document or signature. It shall not be necessary to accompany an electronic signature with a physical or electronic image or a stamp, impression, or seal.

(d) In a proceeding, evidence of a document or signature shall not be excluded solely because it is in electronic form.

502‑C Recording of documents. (a) Notwithstanding any other law to the contrary, and subject to any rules adopted by the department of land and natural resources pursuant to chapter 91, the registrar may:

(1) Accept, make, keep, enter, file, index, store, archive, and transmit electronic documents; provided that the registrar shall continue to accept paper documents for recording, as well, and shall place entries for both types of documents in the same index;

(2) Convert or copy paper documents that are accepted for recording into electronic form;

(3) Convert or copy prior records of documents made in the bureau of conveyances into electronic form;

(4) Accept fees for services rendered under this chapter electronically; and

(5) Enter into agreements with other officials of a state or a political subdivision thereof, or of the United States, on procedures or processes to facilitate the electronic satisfaction of prior approvals and conditions precedent to recording and the electronic payment of fees.

(b) This part shall also apply to any document that is received by the registrar of the bureau of conveyance, or filed at the bureau of conveyances, by the registrar of the land court pursuant to chapter 501.

(c) The department of land and natural resources shall adopt rules pursuant to chapter 91 necessary for the purposes of this part, including when an electronic document shall be considered delivered to the registrar pursuant to section 502‑32.

(d) To keep the standards and practices of recording in the state in harmony with the standards and practices of recording offices in other jurisdictions that enact substantially this part and to keep the technology used by the registrar compatible with technology used by recording offices in other jurisdictions that enact substantially this part, the department of land and natural resources, so far as is consistent with the provisions of this part, in adopting rules under chapter 91, shall consider:

(1) The standards and practices of other jurisdictions;

(2) The most recent standards adopted by national standard‑setting bodies such as, the Property Records Industry Association;

(3) The views of interested persons and governmental officials and entities;

(4) The needs of jurisdictions of varying size, population, and resources; and

(5) Standards requiring adequate information security protection to ensure that electronic documents are accurate, authentic, adequately preserved, and resistant to tampering.

502‑D Uniformity of application and construction. In applying and construing this uniform Act, consideration shall be given to the need to promote uniformity of the law with respect to its subject matter among states that enact it.

502‑E Relation to federal Electronic Signatures in Global and National Commerce Act. This part modifies, limits, and supersedes the federal Electronic Signatures in Global and National Commerce Act, 15 United States Code section 7001, et seq., but does not modify, limit, or supersede section 101(c) of the federal Electronic Signatures in Global and National Commerce Act, 15 United States Code section 7001(c), or authorize electronic delivery of any of the notices described in section 103(b) of the federal Electronic Signatures in Global and National Commerce Act, 15 United States Code section 7003(b)."

SECTION 3. Chapter 502, Hawaii Revised Statutes, is amended as follows:

1. By designating sections 502‑1 to 502‑4 as part I and amending the subdivision heading before section 502‑1 to read:

"PART I. REGISTRAR, DEPUTY"

2. By designating sections 502‑7 to 502‑8 as part II and amending the subdivision heading before section 502‑7 to read:

"PART II. [[]GENERAL PROVISIONS[]]"

3. By designating sections 502‑11 to 502‑27 as part III and amending the subdivision heading before section 502‑11 to read:

"PART III. INDEXING OF RECORDS"

4. By designating sections 502‑31 to 502‑34 as part IV and amending the subdivision heading before section 502‑31 to read:

"PART IV. RECORDING"

5. By designating sections 502‑41 to 502‑54 as part V and amending the subdivision heading before section 502‑41 to read:

"PART V. ACKNOWLEDGMENTS; PROOF OF INSTRUMENTS"

6. By designating sections 502‑61 to 502‑64 as part VI and amending the subdivision heading before section 502‑61 to read:

"PART VI. INTERLINEATIONS, ERASURES, ETC."

7. By designating sections 502‑71 to 502‑74 as part VII and amending the subdivision heading before section 502‑71 to read:

"PART VII. RECORDS OF ACKNOWLEDGMENTS"

8. By designating sections 502‑81 to 502‑85 as part VIII and amending the subdivision heading before section 502‑81 to read:

"PART VIII. REQUIREMENT AND EFFECT OF ACKNOWLEDGING,

RECORDING, NOT RECORDING"

9. By designating sections 502‑91 to 502‑95 as part IX and amending the subdivision heading before section 502‑91 to read:


"PART IX. PRIOR RECORDS"

10. By designating section 502‑101 as part X and amending the subdivision heading before section 502‑101 to read:

"PART X. VETERANS CERTIFICATES"

11. By designating section 502‑111 as part XI and amending the subdivision heading before section 502‑111 to read:

"PART XI. [[]OTHER PROVISIONS[]]"

SECTION 4. Section 502-41, Hawaii Revised Statutes, is amended to read as follows:

"502-41 Certificate of acknowledgment; natural persons, corporations. Except as otherwise provided by [sections 502-50 to 502-52,] law, to entitle any conveyance or other instrument to be recorded there shall be endorsed, subjoined, or attached thereto an acknowledgment in the form provided or authorized in any of sections 502-42, 502-43, or 502-45, or in substantially the following form:

(Begin in all cases by a caption specifying the state or territory and the place where the acknowledgment is taken.)

1. In the case of natural persons acting in their own right:

On ............(insert date), before me personally appeared A.B. (or A.B. and C.D.), to me known to be the person or persons described in and who executed the foregoing instrument, and acknowledged that the person or persons executed the same as the person's or persons' free act and deed.

2. In the case of natural persons acting by attorney:

On ............(insert date), before me personally appeared A.B., to me known to be the person who executed the foregoing instrument in behalf of C.D. and acknowledged that the person executed the same as the free act and deed of said C.D.

3. In the case of corporations or partnerships:

On ............(insert date), before me appeared A.B., to me personally known, who, being by me duly sworn (or affirmed), did say that the person is the president (or other officer, partner, or agent of the corporation, or partnership) of (describing the corporation or partnership), and that the instrument was signed in behalf of the corporation (or partnership) by authority of its board of directors (partners or trustees), and A.B. acknowledged the instrument to be the free act and deed of the corporation (or partnership).

4. In the case of a corporation acknowledging by an individual as its attorney, where the enabling power of attorney has previously been recorded, the acknowledgment of the instrument executed under the power of attorney shall be substantially in the following form:

On ............(insert date), before me personally appeared A.B., to me personally known, who being by me duly sworn (or affirmed), did say that the person is the attorney-in-fact of C.D. (here name the corporation) duly appointed under power of attorney dated ............, recorded in book...., at page..../as document no. ....; and that the foregoing instrument was executed in the name and behalf of said C.D. by A.B. as its attorney-in-fact; and A.B. acknowledged the instrument to be the free act and deed of C.D.

In case the enabling power of attorney has not previously been recorded, omit the reference to its place of record and insert in lieu thereof the words "which power of attorney is now in full force and effect".

5. In the case of a corporation acknowledging by another corporation as its attorney, where the enabling power of attorney has previously been recorded, the acknowledgment of the instrument executed under the power of attorney shall be substantially in the following form:

On ............(insert date), before me personally appeared A.B., to me personally known, who, being by me duly sworn (or affirmed), did say that the person is the president (or other officer or agent of the corporation acting as attorney) of C.D. (here name the corporation acting as attorney) and that C.D. is the attorney-in-fact of E.F. (here name the corporation in whose behalf the attorney is acting) duly appointed under power of attorney dated ............, recorded in book...., at page..../as document no. ....; that the foregoing instrument was executed in the name and behalf of E.F. by C.D. as its attorney-in-fact; that the instrument was so executed by C.D. by authority of its board of directors; and A.B. acknowledged the instrument to be the free act and deed of E.F.

In case the enabling power of attorney has not previously been recorded, omit the reference to its place of record and insert in lieu thereof the words "which power of attorney is now in full force and effect".

6. The following form may be used in lieu of any of the foregoing forms:

On ............(insert date), before me personally appeared A.B. (or A.B. and C.D.), to me personally known, who, being by me duly sworn (or affirmed), did say that such person executed the foregoing instrument as the free act and deed of such person, and if applicable in the capacity shown, having been duly authorized to execute such instrument in such capacity.

In all cases add signature and title of the officer taking the acknowledgment."

SECTION 5. (a) The judiciary shall:

(1) Study what effect electronic recording may have on the adjudication of land court applications under chapter 501, Hawaii Revised Statutes; and

(2) Determine the permissible uses for electronic recording under chapter 501, Hawaii Revised Statutes.

(b) The judiciary shall report its findings and recommendations for legislation to the legislature no later than twenty days prior to the convening of the 2009 regular session.

SECTION 6. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date.

SECTION 7. In codifying the new sections added by section 2 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 8. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 9. This Act shall take effect upon its approval.