Posted by DeliveryBoy on 8/24/06 4:13am
Msg #140493

Question: Border States

I have a question... say you are a notary in a notary state (NC) and live on the border with an atty. state (SC). A title co. calls and wants a cheap closing, and asks you to drive accross the border to notarize the docs.

Is is okay to notarize docs if you are not physically present in your home state for the closing? (Docs say SC but notary stamp says NC, closing takes place in SC). (Excluding the UPL issue).

Also, I've heard that some atty. states will let you notarize docs if either a lawyer is on the phone, you work for a lawyer, or if a lawyer signs off on it; and some states don't let notaries do closings at all. Anybody know which states do what? I think MA allows notaries to do closings under atty. supervision? SC and GA do not?

I think there are 7 atty. states? GA, SC, MA, DE, WV, VT, MD, (and IL requires either an atty. or title agent?).

Reply by ReneeK_MI on 8/24/06 4:36am
Msg #140494

If you have a commission for NC, you are a notary FOR the State of NC. If you want to notarize FOR/in another state, you need to obtain a commission for that state as well. Some states require residency, others don't, each state has their own requirements.

As for the specifics of each 'atty' state - I pass on answering, I'm not in any of those states.

Reply by DeliveryBoy on 8/24/06 5:03am
Msg #140496

That's what I figured. I did a bunch of these "border closings" for higher fees before I read about the UPL stuff on here (i.e. that I was a criminal).

Not in NC now, but I changed my policy to ask the title co.s to try to have the borrowers meet me on my side of the border. I think this is ok? We all do signings for out-of-state properties all the time, right? Not sure about doing an out-of-state signing where the property is in an atty. state. I've done a lot of these and I think it's ok?

Reply by ReneeK_MI on 8/24/06 5:14am
Msg #140499

Just keep your feet on YOUR side of the line =)

Reply by Ernest__CT on 8/24/06 7:07am
Msg #140505

It is fine if the borrowers / signers meet you in your state. You just can't legally notarize outside of the state(s) in which you hold your commission(s).

Reply by Regal/NC on 8/24/06 8:00am
Msg #140509

My understanding of SC is:

A. Property in SC ONLY attorney can close
B. Borrower in SC, property outside of SC, notary can close
C. Borrower outside of SC, property within SC, notary MUST have SC attorney on line during closing

Any transactions conducted otherwise is UPL.

Reply by DeliveryBoy on 8/24/06 8:21am
Msg #140511

ok, got it. If I meet borrowers from SC at the NC border I have to call signing co. and get a SC lawyer to talk to them on the phone and sign off. This is not what I was doing, hope nothing comes up after recording is finished.

Reply by PAW on 8/24/06 8:23am
Msg #140512

>>> C. Borrower outside of SC, property within SC, notary MUST have SC attorney on line during closing <<<

Are you sure? If so, I've been doing it wrong and instructed incorrectly by a local title company as well. I did a full purchase closing a while back for SC property where the new owners are SC residents. They were here (in FL) on business and closed on the property here. No attorney was present or even on the phone during the closing.

If what you say is true (and I'm not doubting that it may possibly be true), can you please provide some links to documentation to support it so I can give it to the title company.

Thank you.

Reply by DeliveryBoy on 8/24/06 8:37am
Msg #140519

PAW,

Try this:

www.scbar.org

Should be an 800 # on there. I would ask for the real estate section or ethics hotline. For those of us too lazy to do this, better safe than sorry?

SC is an atty. state. I've looked into it a little this morning and I think Regal is basically right. I'm not totally sure about the phone closing rule. I thought SC and GA do NOT allow this for in-state closings. I think it's ok if the closing is happening in FL for a SC property. Probably would get title co. to find SC lawyer to be safe. The lawyer you're assigned should be able to answer this question about SC law.

I don't think it's ok for a SC notary to do a closing for a FL property. My understanding was that anything within an atty. state must be closed by an atty. -- even if it's an out-of-state property. Some atty. states are different (MA?) and allow notaries to close with atty. supervision? I'm not entirely sure about this since I'm not in an atty. state. Maybe an SC lawyer will see this and post?

Will wait and see.

Reply by Regal/NC on 8/24/06 8:49am
Msg #140523

Paul,

I have been receiving info regarding this matter from several attorneys within SC. There are several decisions and opinions that address this issue. From what I have researched the info is correct.

The following was posted earlier regarding this matter:
"False. SC law specifically says only a licensed SC attorney may conduct a real estate closing on SC property. A SC notary can do closings on property, so long as it is not SC property.

SC Attorneys are no longer willing to perform what they deem a courtesy/witness only closing, as they risk their bar card/reprimand/fines, should the UPL board find out. Notaries may not conduct any type of closing on SC property - the lawyers have it all sewn up.

There is a situation called a "mail away". The notary, borrower and attorney must all have a copy of the loan docs in front of them, so everyone can follow along, while the attorney goes through the documents. Typically, this occurs when the borrower is not in SC, and so the SC attorney is "present" during the phone call. The notary will then witness the docs and ship the completed docs back as usual.

Borrowers must be given an opportunity to select the closing attorney and the provider of insurance coverage’s. If they express no preference, the lender, real estate agent, or other party may guide them. A Preference Selection form should be a part of all loan packages. (SC Code 37-10-102). Borrowers can demand closing by the closing office of their choice! The lender must abide by your choice, so long as that attorney is qualified.

Our SC Supreme Court continues to make it abundantly clear that all stages of a real estate transaction must be under the direct supervision of a South Carolina attorney. These stages are: (a) Title search and subsequent preparation of certification documentation; (b) preparation of loan documents; (c) supervising the closing and providing advice to the buyer/borrower; (d) recording legal documents; and (d) disbursement of funds. Our associated attorneys assure that the requirements of law are met; and that both lender and borrower are properly represented. "Witness-only closings" common in other States, where only a Notary Public may come to borrowers' home for signing, are prohibited in South Carolina. (State v. Buyers Service, 292 SC 426, 357 SE2d 15; Doe v. McMaster, 355 SC 306, 585 SE2d 773; In the Matter of Fortson, SC Supreme Court Case 25898; and In The Matter of Boyce, SC Supreme Court Case 25985.)

Title in South Carolina is held as tenants-in-common. Basically, this means that an individual may hold title in his/her own name, regardless of marital status. If a husband and wife choose to both own the property, they each own a one-half interest in the property (unless specified otherwise), and even after death or divorce title is still owned 50%/50%.

As long as all of the owners of the property sign the Mortgage, whether 1 or many, lender has a valid lien on the real estate. Only 1 owner may be the financially responsible party (loan applicant), signing the Note and other loan documents; but all owners sign the Mortgage.

Conversely, both husband and wife may be loan applicants, based on combined income, but title to real estate is held by only 1 of them. Both parties will sign Note and other loan documents, but only the 1 vested owner is required to sign the mortgage to give a valid lien.

Owners of property living outside South Carolina, who do not regularly file South Carolina income tax returns, are subject to 7% withholding tax against the gain at time of sale of South Carolina property. The Buyer is required to deduct this tax and transmit it to the South Carolina Department of Revenue; thus it is part of the closing transaction.

Proper execution of a legal document for recording in South Carolina requires 2 independent witnesses (one of whom may be the Notary), in addition to a uniform Notary Acknowledgment, or our unique South Carolina "Probate", signed by one of the witnesses and a Notary Public.

If an Owner has an existing Owner's Title Insurance Policy, it can save them time and money on new transactions. Title search is reduced to cover from date of policy forward. If the policy is less than 10 years old, premium for new policy is discounted."

Reply by Regal/NC on 8/24/06 9:31am
Msg #140537

SC: UPL

I recommend reviewing the info on the SC bar website:


http://www.scbar.org/public/upl/default.asp

Reply by Gerry_VT on 8/24/06 10:20am
Msg #140550

Since you only used SC and NC as an example, let me give you some information about VT.

I bring it up because some people have stated that notaries may never notarize outside their state. This does not seem to be the case for Vermont.

I emailed the person in the Vermont SOS office who is in charge of notaries (Kathy Watters) back in 2005, about whether Vermont was an attorney-only state. She replied in part "The Vermont Bar Association's Advisory Ethics Opinions 2001-02, 1999-03 and 79-23 prohibit non-lawyers from preparing loan closing documents and/or conducting the closing. The only exception is if you are a paralegal working with a licensed attorney." The opinions are on line at http://www.vtbar.org/static/vtbar/attorney_judicial_resources/aeo_index_categories/advisory_ethics_opinion_index.php

The opinions seemed inconclusive to me; they seemed to be written from the point of view of an attorney who already had a client, and wanted to know if he would be neglecting his client if he had his paralegal attend the closing instead of attending himself. But I'm no lawyer, and the general opinion seems to be that Vermont is an attorney-only state.

As for a Vermont notary signing out-of-state, there was some mention on the Vermont SOS's web site that a Vermont notary could take an acknowledgment out of state for real estate that was in Vermont. The law in question may or may not have been Title 1 (Property) Chapter 5 (CONVEYANCE OF REAL ESTATE) Section 379 (Acknowledgment out of State) paragraph b: "Acknowledgments for deeds and other conveyances, and powers of attorney for the conveyance of lands, which are taken out of state before a proper officer of this state, shall be valid as if taken within the state."

Of course this authority would be more important for an attorney/notary or paralegal/notary, since someone who is just a notary apparently can't do a real estate closing anyway.

Reply by Regal/NC on 8/24/06 10:45am
Msg #140554

Gerry,

Per the attached link, an Vermont notary may only notarize within the state:

Jurisdiction

Under Vermont law, your authority to act as a notary extends statewide, in spite of the fact that you are appointed by the superior judges of one county. 24 V.S.A. §441.

In 1994, 27 V.S.A., §379 was added to provide that "Acknowledgments for deeds and other conveyances, and powers of attorney for the conveyance of lands, which are taken out of state before a proper officer of this state, shall be valid as if taken within the state." This applies only to documents that will be returned to Vermont for recording and is the only case where your notary commission may cross state lines.

I believe this is consistent will all states.

Reply by Regal/NC on 8/24/06 10:47am
Msg #140557

I meant pasted info from VT-SOS site N/M n/m

Reply by Gerry_VT on 8/24/06 1:56pm
Msg #140602

I found the page that Regal/NC pasted from at http://vermont-archives.org/notary/guide/Notary6.htm. I interpret it differently than Regal/NC. The passage pasted by Regal says documents that acknowledgements for deeds and other conveyances and powers of attorney for the conveyance of land, and that will be returned to Vermont for recording, is the only case where you notary commission may cross state lines. This disagrees with Regal/NC's statement that a Vermont notary may only notarize within the state.

This is still probably moot for those Vermont notaries who are not lawyers or paralegals.

Reply by Regal/NC on 8/24/06 2:17pm
Msg #140606

Gerry_VT I guess I'm missing something here!


As noted on the VT-SOS site, a VT notary can only notarize "Within" the state that they are commissioned. That is what I was referencing from the VT-SOS site. The issue is location of notary and their commission, not the destination of the document.

Reply by Regal/NC on 8/24/06 2:32pm
Msg #140610

Gerry-VT: Please read the passage from the VT-SOS site



again!!!

"This applies only to documents that will be returned to Vermont for recording and is the only case where your notary commission may cross state lines".

My interpretation is this is referencing documents executed by a notary in say NY and recorded in VT. That is the only instance when a person's "commission" crosses state lines.
The NY notary is located in NY, not VT. Therefore their "commission" crossed state lines. Similarly, VT notary executed documents to be recorded in NY thereby their VT commission crossed state lines.

Reply by Gerry_VT on 8/24/06 4:50pm
Msg #140631

Re: Gerry-VT: Please read the passage from the VT-SOS site

Assuming that UPL issues have somehow been taken care of, I understand the passage to allow Vermont notaries to take acknowledgements on a deed for a Vermont property that will be recorded in Vermont. My reasons are:

1. The passage is on the SOS web site, it is not a law, so the wording may not be hyper-precise.
2. It is the Vermont SOS web site, so when it says "your commission may cross state lines" it means your VERMONT commission may cross state lines. The Vermont SOS isn't addressing advise to notaries from other states.
3. The section of law cited, 27 V.S.A., §379, is titled "Acknowledgement out of state". It says "Acknowledgements . . . taken OUT OF STATE before a proper officer of THIS state, shall be valid . . ." (my emphasis) This is very clearly addressing the case were the Vermont officer is outside of the state when the acknowledgement is taken.

For anyone who stumbles on this out of context, it's all academic since Vermont is probably an attorney-only state.

Reply by Gerry_VT on 8/24/06 4:56pm
Msg #140633

Re: Gerry-VT: Please read the passage from the VT-SOS site

One other point. The VT law about out-of-state real estate acknowledgements that we discussed was paragraph b. Paragraph a already recognizes acknowledgements "certified agreeably to the laws of the state, province or kingdom in which such acknowledgment or proof is taken", so if paragraph b just meant an out-of-state officer could take an acknowledgement in his home state, it would be redundant.

Reply by Regal/NC on 8/24/06 6:07pm
Msg #140649

I yield to the gentleman from VT. Thanks 4 the info N/M n/m

Reply by DeliveryBoy on 9/6/06 11:52pm
Msg #144011

Okay, head is swimming now. I think I understand most of this. General rule seems to be if you're not sure, don't do it.

DB