E. CHRISTOPHER KEHOE
A ‘public safety’ matter

Gov. Mitt Romney’s Executive Order No. 455 regarding the standards of conduct for notaries public has created a stir among notaries throughout the Bay State who say that particular flexing of the government’s authoritative muscle was impetuous and believe the order itself will create more mistakes than do good.

In addition to substantially increasing the duties and responsibilities of a person who is a notary public, the order also requires that a new form of acknowledgment clause be used by notaries public and restricts certain non-attorney notaries public from conducting real estate closings and overseeing additional legal proceedings, including foreclosures, divorce settlements and trusts.

Industry professionals who attach “notary” to their title say the idea behind the order is good, but fear the consequences that they say the order will eventually produce.

“The governor acted [hastily] when ordering this. People who don’t know what they are doing create all kinds of problems and cause extra work for everyone else, and additional stress for the homeowner who was unaware of their rights, to begin with. From that point of view, it’s a good order,” said Stanley Ragalevsky, partner at the Boston-based law firm Kirkpatrick & Lockhart. “The clarification of standards is good … That will increase professionalism among notaries.”

By Romney’s executive order, which became effective immediately after he signed the document on Dec. 19 of last year but postponed compliance until April 19 due to the numerous comments the governor’s office received, all notaries public in Massachusetts become subject to a host of new rules and requirements.

Bearing a ‘Burden’

Those requirements include: a new form of acknowledgement certificate for all recorded documents; mandatory specifications for a notary’s seal, including the notary’s name, the words “notary public,” the words “Commonwealth of Massachusetts,” the expiration date of the notary’s commission and a facsimile of the Great Seal of the Commonwealth of Massachusetts; and a “journal of notarial acts” in a paperbound book with numbered pages. Additionally, the new rules mandate that only Bay State residents can be Massachusetts notaries.

While industry professionals say the majority of the new requirements are reasonable, they note that some rules are tedious and time-consuming.

“They [the governor’s office] have to sort through the housekeeping details … they prescribed new forms that replace forms that have been in existence for number of years. An executive order does not have the same force of law that a statute does, so in terms of pecking order, the executive order [does not override] some of the statutory forms currently in place,” said E. Christopher Kehoe, president of the Real Estate Bar Association of Massachusetts and partner at Robinson & Cole law firm in Boston. “From a notary’s point of view, the requirement that you keep a journal of your notary acts is a large administrative burden. Most good notaries already had this in place, and it’s unfortunate that this executive order was really drafted for a few people who abused their notary standard, but now it affects everyone.”

While publishing houses are already producing bound-book notary journals with sequentially numbered pages – an effort made to prevent pages from being removed or altered – notaries are arguing that the journal entry requirement is burdensome and repetitive. Kehoe said many “good notaries” already have a check-and-balance order in place.

“[Notary journals] are going to prove to be an administrative burden, but you can understand the position of the government to make sure those in notary positions are doing their jobs,” said Kehoe. “However, it may ultimately affect the amount of time involved in real estate closings and ultimately that is going to effect the cost, and make the closing process less efficient and take longer. But, the governor’s office feels that this is such a matter of public safety that it is worth the administrative burden.”

Ragalevsky, however, said the journal creates a bigger problem than just additional paperwork – it creates possible legal issues. He questioned the journal-carrying requirement, saying issues such as validity, client confidentiality and liability could be compromised.

“If an act of a notary is not entered in a log, is the underlying document – for example, a mortgage – not valid against a trustee in bankruptcy of the mortgagor five years later? Is it a violation of client confidentiality if an attorney is forced to produce his log for inspection?” said Ragalevsky. “Ultimately, there will be higher prices for consumers because requirements of keeping a journal is going to be burdensome and timely. And there will be some concerns that if the journal is not kept in the fashion that is required, will that undermine the validity of the document.”

Ragalevsky also said banks are in a difficult position with the new executive order because bankers who are notaries cannot refuse a notary request simply because the request comes from a non-client of the bank.

“Many notary services are provided by banks, and [banks] cannot refuse to sign something simply because the principal is a non-client,” Ragalevsky said. “So, if anyone can come into the bank, will the bank not want to have their employees notarize documents? Also, the journal belongs to the notary, not to the employer. So, if the notary leaves the bank, do they take the clients with them?”

Additionally, Ragalevsky pointed out concerns that client confidentiality could be compromised by the journal requirements.

“Many documents are matters of public record, but probate attorneys will notarize trusts that are not matters of public record and the confidentiality of a consumer would be compromised if the journal had to be turned over,” said Ragalevsky.

While Bay State notaries still have a few months to comply with the executive order, industry professionals believe its additional requirements – while understandable in an effort to combat abusive and unlawful notaries – will essentially result in more mistakes than good practices.

“I understand the need for it in the context of the immigration issues. That was the primary genesis of the thought,” said Kehoe. “I’m glad that the governor’s office has delayed implementation until April. It’s going to be a tremendous burden.”

Ragalevsky said it would have been in the governor’s best interest to handle the issuing of the executive order in more of a legislative capacity.

“Was this something that had to be done in this fashion, almost surreptitiously? When you are going to make changes in the fundamental procedures in the way things are done, it’s best to put those changes out for comment first,” said Ragalevsky. “Moving to April will give people a little more time to figure it all out, but they’ve opened a real can of worms with this. It’s not entirely the governor’s fault, but the fact that the process is more complex now means that it is a lot easier to make mistakes.”

Melanie Nayer may be reached at mnayer@thewarrengroup.com.