Opinion: GA lawmakers must not turn over real estate closings to out-of-state entities

In Georgia, real estate closings are required by law to be supervised by a lawyer, and for good reason.

Having a Georgia lawyer responsible for the entire process - beginning to end - helps protect consumers making the biggest investment of their lives. A bill pending in the Georgia Legislature threatens those critical protections for home buyers.

HB334 would allow Georgia real estate closings for the first time to be conducted online, in a “virtual signing room,” using a remote notary who doesn’t have to be located in Georgia. This will allow an attorney located anywhere in the world to conduct closings virtually using an online notary who can also be located anywhere in the world.

It represents a massive, abrupt change that has had no thorough debate or study of how to maintain the accountability and protections Georgia consumers deserve.

As an attorney who has represented home buyers, sellers and lenders in Georgia for more than 30 years, I’ll admit a proposal to make real estate closings as fast and easy as buying a book on Amazon seems like a good idea at first blush. But, as with most things in life and business, the danger is in the details.

A giant, job-killing loophole in HB334 would let national lenders and title companies that don’t employ Georgians swoop into our state electronically and conduct closings online without local lawyers to supervise closings.

Big national firms are chomping at the bit to see this bill passed so that they can churn out Georgia real estate closings remotely and online while smiling all the way to the bank. They will be accountable to no one. When a Georgia homebuyer has problems or questions after the remote online closing – and they will – it may prove difficult or impossible to get any assistance from these national firms. The Georgia homebuyer will be out of luck and on his or her own.

An online notary might provide efficiency for simple, routine clerical matters, but it could destroy consumer protections if applied to real estate transactions. Georgia legislators specifically carved out wills/estates/trusts from HB334 because too much is at stake in those significant matters to turn them over to an online notary you have never met with a national firm in some other state.

I urge our west Georgia legislators to treat real estate closings with the same care and protection as wills/estates/trusts – carve them out of HB334. We must maintain critical protections for Georgia consumers making the largest purchase of their lives.

Attorney Edward Hudson is a partner at Goggans, Stutzman, Hudson, Wilson & Mize LLP in Columbus.