UT House Bill 47 | NNA

UT House Bill 47

Notary Law Update: UT House Bill 47

State: Utah

Summary:

House Bill 47 clarifies that a Notary Public who performs loan signings within the state of Utah is not required to be licensed as an escrow agent, but also adds that only a licensed escrow agent may explain documents connected with the sale, transfer, encumbering, or leasing of real property.

Signed:  April 01, 2013

Effective:  May 14, 2013

Chapter: TBD

Affects:

Amends Section 31A-1-301 of the Utah Code Annotated

Changes:
  1. Defines “escrow” to include the explanation, holding or creation of a document in a transaction that effects the sale, transfer, encumbering, or leasing of real property by an individual not a party to the transaction.
  2. Exempts from the definition of “escrow” the performance of notarial acts by a Notary, the receipt or delivery of a document, and the receipt of money for delivery to the escrow agent for the transaction.
Analysis:
The culmination of a 2-year battle with the Title and Escrow Commission of the Utah Department of Insurance to require Notary Signing Agents to be licensed as escrow agents has ended with the enactment of House Bill 47. As part of a larger, “omnibus” insurance bill, HB 47 clarifies that the term “escrow” does not include performance of notarial acts by a Notary, the receipt or delivery of a document, and the receipt of money for delivery to the escrow agent for the transaction, the key duties performed by Notary Signing Agents. This “carve out” effectively shields NSAs from having to obtain a license as title producer. That said, the bill also clarifies that “escrow” includes the explanation, holding or creation of a document in a real estate property or loan transaction, meaning that only licensed escrow agents may explain documents to the parties. It was the latter issue that provoked the Title and Escrow Commission to consider regulating Notary Signing Agents under the insurance licensing laws of the state. It had received numerous complaints that NSAs were explaining documents. Going forward, NSAs must avoid explaining documents to borrowers at a loan signing unless they are licensed or risk the imposition of a maximum $5,000 fine per offense by the insurance commissioner under UCA 31A-2-308.
 

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