Posted by kmnotary_CA on 1/4/05 10:11pm
Msg #15443
Question on Financial Gain and notorizing
I think I already know the answer, but wanted to double check. As a realtor I have a "sale from hell" and the buyers have 6kids, and their house isn't finished yet. It is a new manufactured Home, going on a permenent foundation. It has rained here for a couple weeks now and everything is behind schedule.
Anyway, this family is running out of money and asked me tonight if I would sign their docs for them, which would cut down on their closing costs. I told them I have a financial interest, ie: commission, and therefore could not. so, the question is, has anyone ever signed docs that they get a commission from the sale? I was at another Real Estate office signing docs for an agent that said she usually signs the docs for her client. I found this to be a conflict.
Any comments would be appreciated.
| Reply by Jon on 1/4/05 10:48pm
Msg #15445
The State of Ca does not view your situation as a conflict of interest. You can reference Ca Gov Code Sec 8224 which states in part:
"...a notary public has no direct financial or beneficial interest in a transaction where the notary public acts in the capacity of an agent, employee, insurer, attorney, escrow, or lender for a person having a direct financial or beneficial interest in the transaction."
That said, I personally would probably not make a habit of notarizing for my real estate clients(if I was a real estate agent), but I'm sure I would probably come across situations where I may "break" my own rule. If you feel that it would help them and you want to, go ahead.
| Reply by kmnotary_CA on 1/4/05 10:52pm
Msg #15447
Jon,
Thank you for your reply. yes, if there ever was a case to "break my won rule" this would be it. Again thanks for the info.
kathy
| Reply by kmnotary_CA on 1/4/05 10:53pm
Msg #15449
I ment to say "break my own rule."
| Reply by BrendaTX on 1/5/05 7:49am
Msg #15478
A Texas Notary really has to dig to find the answers to questions that seem simple to answer. For instance, this question about conflict of interest falls under the snippet Texas has provided regarding relatives:
MAY I NOTARIZE FOR MY RELATIVES?
The basic rules are: the act of taking and certifying acknowledgments cannot be performed by a notary public financially or beneficially interested in the transaction; and one who is a party to an instrument, cannot act as a notary public. There is no specific prohibition against a notary public notarizing another spouse's signature or a notary public notarizing for a spouse's business. The facts in each situation will determine whether such action is proper.
| Reply by anitap/ca on 1/5/05 2:54pm
Msg #15516
§ 8224. Conflict of interest; financial or beneficial interest in transaction; exceptions
A notary public who has a direct financial or beneficial interest in a transaction shall not perform any notarial act in connection with such transaction.
For purposes of this section, a notary public has a direct financial or beneficial interest in a transaction if the notary public:
(a) With respect to a financial transaction, is named, individually, as a principal to the transaction.
(b) With respect to real property, is named, individually, as a grantor, grantee, mortgagor, mortgagee, trustor, trustee, beneficiary, vendor, vendee, lessor, or lessee, to the transaction.
For purposes of this section, a notary public has no direct financial or beneficial interest in a transaction where the notary public acts in the capacity of an agent, employee, insurer, attorney, escrow, or lender for a person having a direct financial or beneficial interest in the transaction.
Kathy - are you gaining anything you you do their signing? A commision out of this closing. I am reading the above that - if you are say a notary work for a realtor and it is NOT your sale and you are npot gaining anything financially then yes it is ok BUT if are going to to be gaining from this transaction then no you can't do this.
| Reply by Jon on 1/5/05 3:52pm
Msg #15530
I heartily disagree with you Anita, and so does the SOS(at least when I called them  ). If acting as an agent for a person with a direct intrerest, it is not considered a conflict of interest.
"For purposes of this section, a notary public has no direct financial or beneficial interest in a transaction where the notary public acts in the capacity of an AGENT, employee, insurer, attorney, escrow, or lender for a person having a direct financial or beneficial interest in the transaction."
Obviously, all of us have a financial insterest in every notarization we do. If we do the notarization we get $10, if we don't do the notarization we don't get $10. Every one expects to get paid for doing their job. As a real estate AGENT, the individual will get the commission for the sale, but according to state law, that is NOT a conflict.
As I stated earlier, I wouldn't make a habit notarizing for my deals, but under certain circumstances, I probably would.
| Reply by charlie and max on 1/4/05 10:52pm
Msg #15448
Definitely NO! Under your real estate license you could put your broker and yourself in a position of being sued --- don't do it!
| Reply by Paul_IL on 1/4/05 11:08pm
Msg #15452
So just where did you find documentation to back up that opinion?
| Reply by kmnotary_CA on 1/4/05 11:21pm
Msg #15457
Thank you for your reply. My conscious and my empathy sometimes battle each other, and then I try to find answers that fit into whichever emotion is winning at the time
| Reply by Lee/AR on 1/4/05 11:29pm
Msg #15459
Think this MAY be state-specific... and I don't know CA laws. I'd say call your SOS.
| Reply by kmnotary_CA on 1/5/05 12:25am
Msg #15464
Thanks, amazing how we are one union, but all states are so different. Kind of like the EU where the laws and culture in one place are so different than in another, yet all are in the EU.
Thank you all for comments.
| Reply by sue on 1/5/05 12:50pm
Msg #15503
in CA you seem to do things so differently than we do here in PA. Can't they just go to the title office to sign? here, if you close in office during regular business hours there is no settlement fee.
| Reply by BrendaTX on 1/5/05 2:12pm
Msg #15512
sue: "Can't they just go to the title office to sign? here, if you close in office during regular business hours there is no settlement fee."
What I do for $65 here, the title companies charge $250.
| Reply by sue on 1/5/05 4:25pm
Msg #15534
I've had several purchase settlements this year and haven't paid a penny in settlement fee. The lawyer takes his cut directly from the title insurance premium. A lot of the brokers and title companies I work for have ABAs and they all have a disclosure form. On virtually every form it says if you settle in the title office during business hours there is no fee. It goes on from there with what I tell the borrowers is the 'menu'. Of course all my borrowers are paying to close in home so they've got anywhere from $250-$650 added on. They have no idea they'd save all that money if they insisted on using their own local closing agent instead of whomever the broker/lenders gives them.
| Reply by BrendaTX on 1/5/05 5:05pm
Msg #15537
I believe there are differences between Tx and Pa laws that make this a different situation.
If anyone cares, I'll post it the hinky Texas laws and purchases/HELOCs and NSAs, but will spare you for now.
I have been told in no uncertain terms by local title companies that the position of a signing agent is one that has hurt their income and that what we do provides a cheap alternative to the fees they charge at settlement.
| Reply by txbroker on 1/5/05 5:35pm
Msg #15544
I am a real estate broker and notary and I would NOT notarize anything that I have I have a interest in, yes you have a commision from the sale of the property. So you have a financial interest in the sale. This could also come back and involve your broker also. I would stay away from doing that. I'm in Texas and just going by our rules and regulations,
| Reply by kmnotary_CA on 1/5/05 7:29pm
Msg #15557
Txbroker,
Thank you, this is really what I knew, but when the empathy kicks in I felt the need to double check.
Thanks,
kathy
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