GA Senate Bill 365 | NNA
Law

GA Senate Bill 365

Notary Law Update: GA Senate Bill 365

State: Georgia

Summary:

Prohibits anyone other than a lender or attorney licensed by the State Bar of Georgia from conducting real estate settlements and disbursing funds in residential purchase or refinance transactions.

Signed:  May 02, 2012

Effective:  July 01, 2012

Chapter: Act No. 744

Affects:

Amends Section 44-14-13 of the Official Code of Georgia Annotated

Changes:
  1. Prohibits anyone other than a lender or attorney licensed by the State Bar of Georgia from conducting real estate settlements and disbursing funds in residential purchase or refinance transactions in Georgia.
  2. Provides that anyone other than a lender or attorney licensed by the State Bar of Georgia who conducts real estate settlements or disburses funds at a settlement is guilty of a misdemeanor.
  3. Provides that any person violating this section of the Georgia Code is liable to any other party suffering a loss due to such violation for such other party’s actual damages plus reasonable attorneys’ fees and, in addition, to the borrower party suffering the loss an amount of money equal to $1,000.00 or double the amount of interest payable on the loan for the first 60 days after the loan closing, whichever is greater.
Analysis:

The state of Georgia has traditionally been an “attorney-closing state,” meaning that only licensed attorneys may conduct the settlement at which closing documents are signed. In 2003, the Georgia Supreme Court issued Advisory Opinion 2003-2 in which it reaffirmed that nonattorneys may not conduct any part of a real estate closing. This opinion has not stopped some nonattorney Notary Signing Agents from trying to operate under the radar. In addition, in recent years a new phenomenon has emerged in the attorney-closing states. In an attempt to get a piece of the real estate transaction business, Licensed Georgia attorneys who have not been the attorney of record during the entire transaction have conducted “witness-only closings,” basically doing what Notary Signing Agents do – attend only the appointment at which loan and real estate conveyance documents are signed. The companies dispatching these attorneys argued that they met the legal requirement of having an attorney present to conduct the loan closing. However, real estate attorneys across the state argued that it is the law in Georgia that a single attorney must handle all the parts of a real estate transaction, from abstracting title and rendering the title opinion, overseeing the signing of documents, and disbursing funds. SB 365 clarifies that only a lender or a licensed Georgia attorney may conduct settlements and disburse closing funds. The law prohibits anyone other than the settlement agent for the transaction to oversee the closing and disburse funds. The new law effectively joins these two activities together so that the one attorney who is the settlement agent must do both.

Read the bill text.

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