Friday, November 04, 2016

New Notary Law

On October 7, 2016, Governor Charlie Baker signed An Act Regulating Notaries Public To Protect Consumers and the Validity and Effectiveness of Recorded Instruments (Chapter 289 of the Acts of 2016). The law appears to be a codification of Governor Mitt Romney’s 2004 Executive Order on notaries. Real Estate Bar Association seems to have been a prime proponent of this new law (I’ve seen a “Overview of REBA’s Notary Legislation” memo).

I just read through the new statute with two things in mind: Did it change any of the practices I currently follow as a Notary Public; and did it address electronic documents, electronic signatures, or electronic acknowledgements in any way?

In answer to the first issue, the new law seems simply to have turned the executive order into law. (One thing I did learn from today’s reading is that it is permissible for a notary to identify the person signing a document by the “oath or affirmation of a credible witness unaffected by the document or transaction who is personally known to the notary public and who personally knows the individual.”). Otherwise, the rules for notaries seem to mirror the Executive Order.

The new law reamplifies many of the prohibitions on practices that misused the term Notary Public. When the Executive Order first came out, there was much talk about Notaries misrepresenting themselves as authorized to do things that were the sole domain of lawyers. Those provisions remain.
The new law also contains a pretty emphatic section about real estate closings that I don’t believe existed in the old Executive Order. The section I refer to states:

A notary public who is not an attorney licensed to practice law in the commonwealth shall not conduct a real estate closing and shall not act as a real estate closing agent; provided, however, that a notary public who is employed by an attorney so licensed may notarize a document in conjunction with a real estate closing conducted by the attorney and a notary public who is employed by a lender may notarize a document in conjunction with the closing of such lender’s real estate loans.

Perhaps this section explains REBA’s claim of authorship of this new law.

Real estate documents make another appearance in the new law which sets out all of the requirements of a proper acknowledgement, but then concedes that failure to comply with these requirements “shall not have any effect on the validity of the underlying document or the recording of the underlying document.” (Within the Registers of Deeds Association there has been some debate on whether a notary’s failure to strictly follow the rules should prevent a document from being recorded. This law seems to hold that the document should be recorded anyway).

Regrettably, the new law is silent about electronic or digital acknowledgements. That is good, in a way, because it does not specifically prohibit them. But it does not specifically authorize them either. Perhaps that is because there is not a strong market for electronic notarization. The flaw in that logic is that in 2005, there was no great demand for electronic recording, but we started doing it anyway and now it accounts for more than 50% of all recordings. As electronic acknowledgements become more feasible and desirable, hopefully the codification of these ambiguities will not stand as an obstacle to future technological innovation.

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