Governmental Affairs

Electronic Recording: Staying on track in an unpredictable time

By Josh curtis Governmental Affairs Director and Cagney Kilgore AAC Law Clerk

Over the past couple of years, we have seen the pandemic shut down or significantly alter the way businesses handle their operations. One thing that didn’t shut down was recording documents in our clerk’s and recorder’s office. Many Circuit Judges were shutting down their courtrooms. Court house officials were looking to keep staff safe and handle county business in different ways. Circuit Clerks and Recorders who utilize electronic recording were prepared to continue recording documents. Arkansas Governor Asa Hutchinson pushed back on shutting everything down because he knew commerce had to continue. County recorders play a significant role in our state’s economy. Recording business transactions such as deeds, mortgages, liens, and plats could not come to a sudden halt. Gov. Hutchinson said no to shelter in place to allow critical businesses to continue their operations. eRecording allowed for those businesses to continue recording necessary real property documents so that little to no impact was felt.

Each county is unique, just like each state is unique. One thing unique about Arkansas is we have a constitutional office that is devoted to collecting delinquent property taxes. The State Land Commissioner’s Office produces tens of thousands of records each year, and they have always recorded these the old-fashioned way. Arkansas Land Commissioner Tommy Land recently met with members of the Electronic Recording Commission and committed to begin e-recording these records July 1 of this year. This is not the first time Commissioner Land has embarked on an innovative project. Last year he introduced an online auction for properties not sold at the live auction. Having an online auction increases the number of buyers competing for these properties and has proven to be a huge success. This allows these properties to be returned to the tax rolls more quickly. We applaud the commitment from Commissioner Land to enter this partnership to implement electronic recording. This will be beneficial for the counties, the Commissioner’s Office, and all Arkansans we serve collectively.

What is e-recording? E-recording is the name given to the process of creating, managing, and safeguarding digital copies of official public information. It’s far more complicated than simply scanning documents because these records are legally binding and often highly valuable, such as land ownership records. Brian Blackman, vice president and general counsel for Allegiance Title Co., said, “We love e-recording because of the efficiency it offers to our industry, as well as to the consumer. The ease with which it allows us to get documents of record helps to improve the customer experience and decrease risk for those involved in the transaction. Most consumers complete only a few real estate transactions in their lifetime, so the overall process is foreign to many of them. In my view, anything we can do to simplify that process, such as e-recording, is a huge win.”

The Electronic Recording Commission was created in 2007 under the Uniform Real Property Electronic Recording Act (URPERA). This Commission is appointed by the Governor and works together supporting the URPERA. They consider the views and resources of all interested parties as it pertains to the county recorders, title industry, financial industry, legal community, and the private sector. The Commission works to develop standards and practices that work in harmony with other jurisdictions. Once developed and approved, it will implement and carry forward the most recent standards of the Property Records Industry Association (PRIA). The Commission will review and make recommendations for possible policy and statutory changes that would bring statewide continuity to the electronic recording process so that we are promoting the most efficient and secure services to all citizens.

Electronic recording is the way of the future, and with more than 60 percent of counties e-recording in our state, Arkansas is keeping step and outpacing many of our Southern counterparts (only 43 percent of counties in Mississippi e-record and only 38 percent in Texas, for example). Every state in the nation allows documents to be e-recorded in some fashion, but the type of documents e-recorded and the extent of each state’s e-recording capabilities vary significantly. E-recording is not yet mandatory in any state, but there are almost 15 states in which every county accepts e-recorded documents. The most common type of e-recorded documents are real estate records thanks to the passage of the URPERA in 38 states and the District of Columbia. URPERA empowers county officials to officially accept and record electronic real estate documents because the legislation equates electronic documents and signatures with original paper documents and wet ink signatures.

Act 3 of the third extraordinary session of the 90th General Assembly moved the Electronic Recording Commission out from under the Bureau of Legislative Research and appointed the Association of Arkansas Counties to support its mission. This was one of many bills the Commission worked on with the legislature to keep the standards and practices of county recorders in this state updated with the standards and practices

of recording offices in other jurisdictions. The Commission adopted a memorandum of understanding (MOU) that they encouraged all recorders to use between them and trusted submitters. The Arkansas Circuit Clerks Association voted to support and use the recommended MOU.

The Commission takes pride in promoting e-recording. On multiple occasions they have taken their meetings on the road and into communities to show off the benefits of this service.

“E-recording is a much faster and more efficient way of receiving and recording documents. It allows for the Recorder to communicate any errors to the submitter immediately and resolve the errors and to record within minutes to a few hours, eliminating wasted waiting time that traditional ways can take,” said Brenda DeShields, Benton County Circuit Clerk and Recorder and the chair of the Arkansas Electronic Recording Commission. “It also allows for guaranteed funds as they are transmitted daily by ACH files so no longer having to wait on checks to clear or hassles of insufficient funding, which makes the accounting process much more streamlined for all involved. It is a wonderful service for a Recorder to offer as really all who use it — recorders, title companies, attorneys, financial institutions, government agencies, etc. — benefit from it, but especially the citizens.”

“WACO Title uses e-recording for all counties where it is available. e-recording saves time and reduces costs,” added Meredith Lafreniere, director of title operations at WACO Title Company. “It allows us to record much quicker than we would be able to if we had to take the original document to the Clerk’s office for recording. This reduces the gap of time between when the customer signs and when the documents are recorded.”

Electronic recording is becoming more common in other contexts, too. Every state except New York has adopted some version of the Uniform Electronic Transactions Act (UETA), which gives electronic records and signatures the same effect as paper documents and handwritten signatures. UETA also allows states to conduct e-commerce transactions, transfer records electronically, and store government agency records online more efficiently. Furthermore, around half of the states, including Arkansas, have adopted some form of Remote Online Notarization (RON), which allows a person to speak with a notary and execute a document using videoconferencing technology, instead of being physically present with them. Several states approved RON on an emergencybasis during the COVID-19 pandemic and are working toward permanent approval.

These statutes enable a considerable amount of innovation in the e-recording space. For example, Cayuga county in New York is using some of its American Rescue Plan Act money to completely digitize all its county records. Trumbull County, Ohio, has a partnership with the State Auditor to route e-recorded documents directly between county offices and the state. Arkansas counties are leading in this innovation, too, with their historic e-recording partnership with the Land Commissioner. Commissioner Tommy Land said, “This partnership will allow land records to be more efficiently managed and accessible for the benefit of all Arkansans. With its perfect blend of secure technology and collaboration, I hope Arkansas’ newest e-recording innovation serves as an example for other states.”

Arkansas Land Commissioner Tommy Land poses with members of the Elec-

tronic Recording Commission at the Circuit Clerk’s Meeting in Texarkana. Pictured left to right: Craighead County Circuit Clerk Candace Edwards, Poinsett County Circuit Clerk Misty Russell, Washington County Circuit Clerk Kyle Sylvester, Faulkner County Circuit Clerk Crystal Taylor, Arkansas Land Commissioner Tommy Land, Saline County Circuit Clerk Myka Bono Sample, Benton County Circuit Clerk and Committee Chair Brenda DeShields, Crawford County Circuit Clerk and Vice Chair Sharon Blount-Baker, and Union County Circuit Clerk Cheryl Cochran-Wilson.