Law NC House Bill 332 Notary Law Update: NC House Bill 332State: North CarolinaSummary:HB 332 contains amendments to many so-called “curative” Notary statutes, which correct or validate certain notarial acts performed with defects or errors. The bill also addresses certain misconduct performed by attorneys who are Notaries and repeals the previous requirement that an applicant for a Notary commission must obtain the signature of one publicly elected official and submit the recommendation with the commission application. HB 332 also clarifies that Notaries do not have a disqualifying interest solely because of the Notary’s employment by a party to the record or solely because the Notary owns stock in a party to the record. The bill also clarifies that a personal representative of a Notary who is not a Notary does not have to comply with the requirement to notify the Secretary in writing of the Notary’s death and deliver the Notary’s seal to the Secretary for destruction, if the representative states under oath in an enforcement proceeding that he or she did not know the deceased was a Notary. Notary provisions take effect July 1, 2013, and other provisions upon being signed into law by the Governor. Signed: June 26, 2013Effective: July 01, 2013Chapter: 2013-204Affects:Amends NCGS 10B-5, 10B-20, 10-37, 10B-55, 10B-60, 10B-65, 10B-67, 10B-68, 10B-69, 10B-71, 10B-99 and other sections of the General Statutes not reported in this New Law Alert Changes: Repeals the prior requirement that an applicant for a Notary commission must obtain the recommendation of one publicly elected official and submit the recommendation with the application, and the exemption from this requirement of any applicant who seeks to receive the oath of office from the register of deeds of a county where more than 5,250 active Notaries are on record on January 1 of the year when the application is filed. Clarifies that a Notary who is an employee of a party shall not be disqualified from notarizing solely because of the Notary’s employment by a party to the record or solely because the Notary owns stock in a party to the record. Provides that personal representative of a Notary who is not a Notary does not have to comply with the requirement to notify the Secretary in writing of the Notary’s death and deliver the Notary’s seal to the Secretary for destruction if he or she provides a statement under oath in any enforcement proceeding that he or she was unaware that the decedent was a commissioned Notary at the time of death. Requires the Secretary to notify the NC State Bar of any final decision finding a violation of NCGS 10B-60(a) by a Notary who is also an attorney; provides that the Secretary shall endeavor to provide a copy of any court order rendered under subsection NCGS 10B-60(b), (c), (d), (e), (f), or (j) to the State Bar in cases where the Notary is an attorney; and provides that any referral by the Secretary to the State Bar under NCGS 10B-60 shall be considered a showing of professional unfitness under NCGS 84-28(d), and the State Bar shall administer discipline accordingly. “Cures” defective notarial acts in which the date of the acknowledgment, the verification or proof, or the oath/affirmation states the correct day and month but lacks a year or states an incorrect year; and other technical defects including, but not limited to, the absence of the legible appearance of the N otary’s name exactly as shown on the Notary’s commission as required in NCGS 10B-20(b), the affixation of the Notary’s seal near the signature of the principal or subscribing witness rather than near the Notary’s signature, minor typographical mistakes in the spelling of the principal’s name, the failure to acknowledge the principal’s name exactly as signed by including or omitting initials, or the failure to specify the principal’s title or office, if any. Provides that an erroneous commission expiration date on a notarized document, irrespective of when the act was performed, shall not affect the sufficiency, validity, or enforceability of the notarial certificate or the related record if the Notary is, in fact, lawfully commissioned at the time of the notarial act. Clarifies that technical defects, errors, or omissions in a notarial certificate shall not affect the sufficiency, validity, or enforceability of the notarial certificate or the related instrument or document, irrespective of when the notarization was performed. Note: this provision applied formerly to notarial certificates made on or after December 1, 2005. Validates all Notary acknowledgments performed before December 1, 2005, bearing a notarial seal. Note: previously the provision applied only to acknowledgments performed before January 1, 1953. Validates a notarial act if it complies with the law as it existed on or before December 1, 2005, irrespective of when the act was performed. Note: previously this provision applied only to notarial acts performed before October 1, 2006. Provides that a notarial certificate is deemed to be valid if the certificate contained in a form issued by a NC state agency prior to April 1, 2013, provided the certificate complied with the law at the time the form was issued. Note: previously the limiting date was October 1, 2006. 11. Provides that a notarial act performed on or after May 15, 2004 and April 1, 2013 is validated on any acknowledgment taken and any instrument notarized by a person who after recommissioning failed to again take the oath as a Notary, and further provides that the instrument shall have the same legal effect as if the person qualified as a Notary. Note: previously the limiting dates were for notarizations performed on or after May 15, 2004 and July 8, 2009. Provides if the proof or acknowledgment of any instrument is made before a Notary of any state other than North Carolina and the instrument does not show the seal or stamp of the Notary, provide evidence that a seal or stamp is not required and the expiration date of the commission of the Notary, or state that the Notary’s commission does not expire or is a lifetime appointment, the certificate of proof or acknowledgment must be accompanied by the certificate of the county official before whom the Notary qualifies for office or of a state officer authorized to issue certificates regarding notary commission status under the official’s and seal, stating that the Notary was a validly-commissioned Notary at the time, and that the signature of the Notary on the certificate is valid. Provides that a proof or acknowledgement which does not require a seal or stamp of the Notary to be effective in the jurisdiction issuing the Notary’s commission shall include either (a) a statement by the Notary within the proof or acknowledgment area of the instrument that the Notary is not required to utilize a seal or stamp or (b) a reference that purports to be the statute of the commissioning state which provides that no seal or stamp is required together with a statement that the Notary is not required to utilize a seal or stamp. Provides that before any transfer of real property executed by an attorney in fact empowered by a power of attorney governed by NCGS Article 1, Article 2, or Article 2A of Chapter 32A, the power of attorney or a certified copy of the power of attorney shall be registered in the office of the register of deeds of the county in which the principal is domiciled or where the real property lies, and provides additional rules for powers of attorney executed by persons who are not NC residents or for powers of attorney affecting properties that are situated in more than one county of the state. Provides that a corrective affidavit made by a Notary in order to correct a notarial certificate that was attached to an instrument already recorded with the register of deeds prior to, on or after April 1, 2013, shall identify the correction; and further provides that a Notary may attach a new acknowledgment completed as of the date the original acknowledgment took place. The new acknowledgment shall be deemed attached to the original recording, and the instrument’s priority shall remain the date and time originally recorded. Analysis:North Carolina’s statutes contain numerous so-called “curative” statutes, which correct or validate notarial acts containing various “defects.” These defects are explicitly listed in statute and include such things as failing to affix a legible seal, failing to write in a commission expiration date, and the like. There is even a provision curing a defect in which the Notary failed to take the oath of office before the county clerk at the beginning of the commission term. These statutes are aimed at protecting innocent persons who must rely on the notarized document containing the defect or error. For example, if the Notary who notarized a mortgage failed to take the oath of office qualifying him or her to be a Notary, why should the mortgagee in the transaction suffer on account of the Notary’s error by having the mortgage invalidated? While the policy and legal rationale behind these curative statutes is understandable, curative statutes do indirectly promote sloppiness and lack of care by Notaries. However, it should be pointed out that in North Carolina, even though documents are validated and cured by these statutes, the Secretary of State may still investigate and censure Notaries who make mistakes. HB 332 contains numerous amendments to several curative statutes appearing both in Chapter 10B of the General Statutes (the chapter containing the Notary laws) and in the real property and probate statutes. In addition, HB 332 addresses certain misconduct performed by attorneys who are Notaries, and repeals the prior requirement that an applicant for a Notary commission must obtain the recommendation of one publicly elected official and submit the recommendation with the application. The bill also clarifies that a personal representative of a Notary who is not a Notary does not have to comply with the requirement to notify the Secretary in writing of the Notary’s death and deliver the Notary’s seal to the Secretary for destruction, if the representative states under oath in an enforcement proceeding that he or she did not know the deceased was a Notary. Finally, the bill also clarifies that a Notary who is an employee of a party shall not be disqualified from notarizing solely because of the Notary’s employment by a party to the record or solely because the Notary owns stock in a party to the record. Read the bill text.