NC Senate Bill 671 | NNA
Law

NC Senate Bill 671

Notary Law Update: NC Senate Bill 671

State: North Carolina

Summary:

North Carolina has adopted the most comprehensive legislation to date that was modeled after the Model Notary Act of 2002, including many of the provisions in Article III concerning electronic notarization, as part of a bill enacting the Uniform Real Property Electronic Recording Act.

Signed:  September 13, 2005

Effective:  December 01, 2005

Chapter: 2005-391

Affects:

Adds a new Article 1A to Chapter 47 of the North Carolina General Statutes (NCGS), repeals Chapter 10A of the NCGS, and adds a new Chapter 10B

Changes:

Electronic Recording

  1. Enacts the Uniform Real Property Electronic Recording Act.
  2. Authorizes a Notary to use an electronic signature in notarizing an electronic real property document.
  3. Provides that a physical or electronic image of a Notary’s stamp, impression, or seal need not accompany a notarization of an electronic document presented for recording electronically.

Notary Public Act

Definitions

  1. Adopts in whole or in part the Model Notary Act definitions of “acknowledgment,” “affirmation,” “commission,” “notarial certificate and certificate,” “Notary Public and Notary,” “oath,” “personal appearance,” “principal,” “regular place of business,” “satisfactory evidence of identity,” and “seal.”
  2. Broadens the definition of “satisfactory evidence of identity” by requiring the federal- or state- issued ID presented to a Notary to contain a photograph and either a physical description or signature.
  3. Defines “Notary Public” as a public officer of the state of North Carolina.

Applying, Commissioning and Qualifying

  1. Allows legally emancipated minors to become Notaries.
  2. Requires applicants for a commission to reside legally in the United States.
  3. Requires applicants for a commission to be able to speak, read, and write the English language.
  4. Exempts applicants in counties where the population of Notaries exceeds 15,000 active Notaries from obtaining the recommendation of one publicly elected official on the application.
  5. Empowers the Secretary of State to deny an application (a) upon the plea of admission of nolo contendere to a felony or crime involving dishonesty or moral turpitude and forbids a commission to be granted to an applicant within 10 years after release from prison, probation, or parole, whichever is later; or (b) if an applicant has had a Notary commission or professional license in North Carolina or any other state or nation denied (existing law covers revocations, suspensions, and restrictions only).
  6. Provides requirements for the form and content of the Notary application, including a new declaration under oath.
  7. Specifies that the state-required Notary education course required of all first-time applicants must be not less than six hours long (previously, not less than three hours but not more than six) and requires that the course be taken within the three month period preceding application.
  8. Requires both new and renewing Notaries to pass a written examination with a score of 80% (members of NC Bar are exempt from exam, course).
  9. Lengthens the period to 45 days (previously 30 days) when the commissioned Notary must appear before the register of deeds in the county of commissioning to take the required qualifying oaths and before the register of deeds must return the commission to the Secretary of State for a failure to appear.
  10. Declares all notarizations performed during the period before the Notary has taken the oath of office invalid and prohibits Notaries from notarizing during this period.
  11. Allows a Notary to apply for recommissioning no earlier than 10 weeks prior to the expiration of the current commission and up to 1 year after the expiration of the current commission.
  12. Requires state-certified Notary instructors to have at least one year of active experience as a Notary (previously six months).

Notarial Acts, Powers, and Limitations

  1. Requires identification for all notarial acts that are oaths and affirmations.
  2. Adopts Model Notary Act provisions for notarizing a signature by mark and signature by Notary when the signer is unable to sign.
  3. Adopts Model Notary Act provisions prohibiting Notaries from notarizing if the signer or subscribing witness shows a demeanor that causes the Notary to have a compelling doubt that the principal knows the consequences of the transaction requiring a notarial act or if the signer or subscribing witness is not acting of his or her own free will.
  4. Prohibits as the unauthorized practice of law “assisting another person in drafting, completing, selecting, or understanding a record requiring a notarial act.”
  5. Prohibits a Notary from prescribing a particular notarial certificate for a transaction, but allows the Notary to offer, for the signer’s choice, a selection of certificate forms authorized by Chapter 10B or by other law.
  6. Requires Notaries to cross out or mark through all blank lines or spaces in a notarial certificate before signing the certificate, except in cases where the blanks in a certificate provided for in NCGS 47-43 indicating where a power of attorney is recorded is not known to the Notary at the time the Notary completes and signs the certificate.
  7. Provides that a Notary’s failure to cross out blank lines in a notarial certificate does not affect the sufficiency, validity, or enforceability of the certificate.
  8. Prohibits Notaries from claiming that they have powers, qualifications, rights, or privileges that the office of Notary does not have, including the ability to counsel on immigration matters.
  9. Prohibits a Notary from executing a notarial certificate containing information the Notary knows or believes is false.
  10. Specifies that Notaries may only execute an English-language certificate, but also permits Notaries to notarize a foreign-language document if the certificate is in English; but even in cases where the English certificate is also translated into the other language, the non-English certificate may not be notarized.
  11. Prohibits use of the Notary’s seal or title to endorse, promote, denounce, or oppose a product, service, contest, candidate, or other offering.

Notary Fees

  1. Raises the fee for an acknowledgment from $4 to $5 per principal signature.
  2. Raises the fee for administering an oath or affirmation without a signature to from $4 to $5 per person, but clarifies that Notaries may not charge for administering an oath to a credible witness.
  3. Prohibits Notaries from conditioning the fee charged for a notarial act on any attribute of the signer that would constitute an unlawful discrimination.
  4. Clarifies that Notaries may charge up to the maximum fee allowed by law for a notarial act or not charge a fee, if they so desire.
  5. Requires Notaries who charge fees to display an English-language schedule of fees in at least 10-point type outside their places of business or to present the fee schedule to a customer.

Notary Seal

  1. Requires Notaries to secure their seals when not in use and disallows use of the seal by persons other than the Notary.
  2. Prohibits a Notary from surrendering the seal to an employer upon leaving employment.
  3. Requires that the seal must be affixed to every paper document near the Notary’s signature, and that the seal and signature of the Notary must appear on the same page. It must be affixed only at the time of notarization.
  4. Prescribes the format and dimensions of the seal as follows: (a) circular – not less than 1½ inches, but not more than 2 inches in diameter; (b) rectangular – not greater than 1 inch high and 2½ inches long; and (c) both seal types must contain a visible border.
  5. Clarifies that the name of the county as required to be included in the seal must include the word “County” or the abbreviation “Co.”
  6. Requires Notaries within 10 days of discovering that the seal has been stolen, lost, damaged, or otherwise rendered unusable to inform law enforcement in the case of theft or vandalism of the seal, and to notify the register of deeds and the Secretary of State in writing.
  7. Requires Notaries to deliver the seal to the Secretary of State as soon as is reasonably practicable after resignation or expiration of the commission (previously only upon revocation of the commission), or upon the Notary’s death. (Note: In another section of the new chapter, the law says the seal must be returned to the Secretary within 45 days after resignation or expiration of the commission. In the event of the Notary’s death during the term of commission or before the Notary has returned the seal as required, the estate of the Notary must inform the Secretary of the Notary’s death and return the seal no later than the closing of the estate.)
  8. Exempts a Notary whose commission has expired, and whose previous commission or application was not revoked or denied, from the seal disposition requirement if the Notary intends to be recommissioned and is recommissioned within 3 months after the current commission expires.
  9. Declares a notarial act invalid if the expiration date contained in the seal is incorrect at the time the notarization is performed.

Notarial Certificates

  1. Provides that an acknowledgment certificate that is not a statutory form is sufficient if it contains the following elements: (a) venue; (b) name of principal; (c) method of identifying the signer; (d) indication of the signer’s personal appearance before the Notary and voluntary acknowledgment of the signature; (e) date of acknowledgment; (f) signature and seal or stamp of Notary; and (g) Notary’s commission expiration date.
  2. Provides that a verification or proof by subscribing witness certificate that is not a statutory form is sufficient if it contains the following elements: (a) venue; (b) name of subscribing witness; (c) method of identifying the subscribing witness; (d) name of the principal whose signature is to be verified or proven; (e) a statement that the subscribing witness took an oath that the witness is not a named party to the document, has no interest in the document, signed the document as a witness and that the witness either saw the principal execute the document or took the principal’s acknowledgment of an already-affixed signature; (f) date of verification or proof; (g) signature and seal or stamp of Notary; and (h) Notary’s commission expiration date.
  3. Provides that an oath or affirmation certificate that is not a statutory form is sufficient if it contains the following elements: (a) venue; (b) name of principal; (c) method of identifying the principal; (d) a statement that the principal signed the document in the Notary’s presence and took an oath vouching for the truth of the matters stated in the document; (f) date of oath or affirmation; (g) signature and seal or stamp of Notary; and (h) Notary’s commission expiration date.
  4. Clarifies that notarial forms made in another jurisdiction are sufficient if they are drafted in conformance with federal and state law where the certificate was made, and allows Notaries to complete these forms on documents to be filed, registered, recorded, or delivered in that state.
  5. Provides new statutory certificates for an acknowledgment, a verification or proof by subscribing witness, and an oath or affirmation, and specifies the certifications the Notary makes when executing these forms.
  6. Clarifies that any statute that permits or requires the use of a notarial certificate within Chapter 47 of the General Statutes is satisfied by the execution of a certificate permitted under the Notary Public Act, but that nothing in the Notary Public Act authorizes the use of forms contained in the Notary Public Act in place of or as an alternative to a law specifying the particular form or content of a notarial certificate outside Chapter 47, including, but not limited to, NCGS 31-11.6, Chapter 32A, and NCGS 90-321.

Status Changes

  1. Requires a Notary to fax, email or mail by certified mail, return receipt requested, a signed notice of a change of the Notary’s business or any mailing address or phone number (previously residence address only) to the Secretary of State within 45 days of the change (previously by certified mail only within 30 days).
  2. Requires a Notary to fax, email or mail by certified mail, return receipt requested, a signed notice of a change of the Notary’s name, including both old and new names, to the Secretary of State within 45 days of the change (previously by certified mail only within 30 days).
  3. Permits a Notary who changes his or her name on the commission to notarize in the previously commissioned name until the following steps are completed, upon which time the Notary must notarize with the new name: (a) the Notary receives confirmation of the name change from the Secretary of State; (b) the Notary obtains a new seal with the new name; and (c) the Notary appears before the register of deeds within 45 days of the effective date of the change to qualify by taking the required oaths under the new name and to have the Notary record changed to reflect the change.
  4. Clarifies that a Notary who moves to a new county within the state remains commissioned through the current commission term and is not required to obtain a new seal, but that when recommissioned to a new term, the Notary must obtain a new seal bearing the name of the new county and appear before the register of deeds in the new county to be duly qualified.
  5. Requires a Notary who has changed his or her name and also moved to a new county to submit an application for recommissioning as a Notary, but allows the Notary to continue notarizing under the previous commission name and with the old seal until: (a) the Notary receives confirmation of the reappointment from the Secretary of State; (b) the Notary obtains a new seal with the new name and name of the new county; and (c) the Notary appears before the register of deeds within 45 days of the effective date of the change to qualify by taking the required oaths for the new commission.
  6. Requires a Notary who wishes to resign the commission to fax, email or mail by certified mail, return receipt requested, a signed notice of resignation with an effective date (previously, by certified mail only).
  7. Requires Notaries who no longer reside in or maintain a regular place of business in the state, or who become permanently unable to perform official duties, to resign and deliver their seals to the Secretary of State by certified mail, return receipt requested.

Enforcement and Penalties

  1. Authorizes the Secretary of State to warn, restrict, suspend, or revoke a commission for any violation on a ground for which an application may be denied.
  2. Categorizes as a Class 1 misdemeanor: (a) holding one’s self out to the public as a Notary without having a commission; (b) notarizing with an expired commission; and (c) notarizing before taking the oath of office.
  3. Categorizes as a Class 1 felony: (a) taking an acknowledgment or jurat without the principal present if the Notary intends to commit fraud; and (b) taking a verification or proof by subscribing witness without the person appearing if the Notary intends to commit fraud; (c) notarizing with the knowledge that the person is not commissioned as a Notary; and (d) obtaining, using, concealing, defacing, or destroying the seal or notarial records of a Notary without authority.
  4. Clarifies that resignation or expiration of a Notary’s commission does not terminate or preclude an investigation into the Notary’s conduct by the Secretary of State, who may bring an investigation to a conclusion.
  5. Provides that the sanctions and remedies under Chapter 10B supplement other sanctions and remedies provided by law, including, but not limited to, forgery and aiding and abetting.

Electronic Notary Act – Definitions and Scope

  1. Adopts 7 definitions pertaining to electronic acts performed by Notaries.
  2. Clarifies that the Notary Public Act applies to all acts under the Electronic Notary Act, and states that if there is a conflict between the two Acts, the Electronic Notary Act shall control.

Qualifications and Registration

  1. States the several qualifications for electronic Notary registration a person must meet: (a) be a North Carolina Notary; (b) abide by all the provisions of the Notary Public Act; (c) take a course of instruction of at least 3 hours on the laws, procedures, technology and ethics of electronic notarization approved by the Secretary of State and pass an examination of the course (note: this course is in addition to the required course to become a Notary); and (d) submit a registration form as an electronic Notary.
  2. Prescribes the form and content of the registration form for registration as an electronic Notary, including Model Notary Act Article 3 requirements that the Notary describe the technology the Notary will use to create an electronic signature in performing electronic acts, including any device issued or registered through a certification authority.
  3. Adopts Model Notary Act provisions for the Notary electronically signing and transmitting the registration form, including the decrypting instructions, codes, keys, or software that allow the registration form to be read.
  4. Requires a Notary to electronically transmit  to the Secretary of State any changes in information in the Notary’s electronic registration within 10 days under the Notary’s electronic signature.
  5. Sets a $50 fee for registering or reregeristing as an electronic Notary.

Electronic Notarial Acts, Powers, and Limitations

  1. Authorizes Notaries to perform electronic (a) acknowledgments; (b) jurats; (c) verifications or proofs; and (d) oaths and affirmations.
  2. Prohibits an electronic notarization from being performed if the signer is not: (a) present before the Notary at the time the electronic act is performed; and (b) is not personally known or identified by the Notary through satisfactory evidence; and (c) for any reason a paper-based notarial act specified under Chapter 10B-14 cannot be performed.
  3. Dictates that the following components be attached to, or logically associated with, the electronic document by the Notary, all which must be immediately perceptible and reproducible in the electronic record to which the Notary’s electronic signature is attached: (a) the Notary’s name, state, and county of commissioning exactly as on the commission; (b) the words “Electronic Notary Public”; (c) the words “State of North Carolina”; (d) the expiration date of the commission; (e) Notary’s electronic signature;  and (f) notarial wording for the notarization being performed.
  4. Authorizes use of the statutory notarial certificates in the Notary Public Act for electronic notarial acts.

Fees for Electronic Notarizations

  1. Sets the maximum fees for performing electronic acts: $10 per signature for acknowledgments, jurats, and verifications or proofs; and $10 for oaths and affirmations.

Electronic Signature and Seal

  1. States that the Notary’s electronic signature in combination with the Notary’s electronic seal may only be used for the purpose of performing electronic notarizations.
  2. Authorizes the Secretary of State to adopt rules relating to a Notary’s electronic signature and seal.
  3. Requires a Notary to keep the electronic seal and signature under the Notary’s control when not in use and not to allow any other person to use them.
  4. Authorizes the Secretary of State to adopt rules relating to integrity, security, and authenticity of electronic notarizations.
  5. Requires Notaries to take the same steps to notify law enforcement, the register of deeds, and the Secretary of State when the Notary’s electronic signature and seal have been stolen, lost, damaged, or otherwise rendered unusable as when the Notary’s physical seal has been stolen, lost, damaged, or otherwise rendered unusable.
  6. Adopts the Model Notary Act requirement that a Notary take reasonable steps to ensure any registered device used to create the Notary’s electronic signature is valid and current and, if changed or expired, cease performing electronic notarizations until a new device is duly issued or registered to the Notary and an electronically signed notice is transmitted to the Secretary of State updating information in the most recently issued registration form.

Journal of Electronic Acts

  1. Permits Notaries to keep electronic records and prohibits the records from being destroyed or surrendered except as required by court order or under rules adopted by the Secretary of State.
  2. Permits the Secretary of State to require Notaries to keep a journal for each electronic act, subject to rules which shall become effective 18 months after the effective date of the Act.
  3. Empowers the Secretary of State to suspend a Notary’s electronic powers upon the failure to produce within 10 days a request for any record required by a rule adopted by the Secretary for recordkeeping.
  4. Requires all records of electronic notarial acts required by statute or rule to be delivered to the Secretary of State upon resignation, revocation or expiration of an electronic Notary commission, or upon the Notary’s death.

Disposition of Software

  1. Adopts Model Notary Act provisions for the erasure, deleting or destruction of the software, coding, or electronic methods for affixing the Notary’s electronic signature, upon the resignation or revocation of the electronic Notary’s commission; except in the case where a former electronic Notary’s previous commission or application was not revoked or denied and the Notary is recommissioned and reregistered as an electronic Notary using the same electronic signature within 3 months after commission expiration

Authentication of Electronic Notarial Acts

  1. Authorizes the Secretary of State to issue electronic certificates of authority authenticating the official electronic signature and seal of an electronic Notary and adopts the Model Notary Act verbiage for the certificate verbatim.

Enforcement and Sanctions

  1. Empowers the Secretary of State or the Secretary’s designee to issue a warning or restrict, suspend, or revoke an electronic Notary’s registration for any violation on a ground for which an electronic Notary registration application may be denied.
  2. Categorizes as a Class G felony the act of creating, manufacturing, or distributing software for the purpose of allowing a person to act as an electronic Notary without being commissioned.
  3. Categorizes as a Class I felony the act of wrongfully obtaining, concealing, damaging, or destroying the electronic means by which a Notary creates an electronic signature.
Analysis:

North Carolina has adopted the most comprehensive legislation to date that was modeled after the Model Notary Act of 2002, including many of the provisions in Article III concerning electronic notarization. The new Notary laws were appended to a bill enacting the Uniform Real Property Electronic Recording Act in a “coattails” strategy to lend impetus to the Notary provisions. Note: The recently enacted House Bill 1217 that raised Notary fees to $4 effective August 26, 2005 is superseded by Senate Bill 671’s fee increase to $5 effective December 1, 2005.

Read the bill text.

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