Thursday, March 9, 2017

Electronic Acknowledgements


By Richard P. Howe Jr.

Several weeks ago, an out-of-state title company sent a letter asking if the Middlesex North Registry
of Deeds would record a mortgage that was acknowledged in Virginia in accordance with that state’s remote electronic acknowledgement law. In Virginia, an authorized electronic notary may take an acknowledgment online using audio-video conference technology, even though the person executing the document is not in the physical presence of the notary.
My initial thought was, “Remote electronic notary? No way!” but I delayed answering the query with an “I’ll have to see the document before deciding” response.
On further review, my opinion has changed. The Massachusetts Deed Indexing Standards say that for a document executed outside of Massachusetts, an acknowledgement may be taken by a justice of the peace, notary public, or magistrate of the state in which the acknowledgement was taken. Implied in that standard is that the acknowledgement was taken in accordance with the laws of that non-Massachusetts jurisdiction. When deciding whether to record such a document, Massachusetts registries just assume compliance with the law of the other jurisdiction and do not verify it since we cannot realistically track the notary laws of every jurisdiction in America.
This outcome also assumes the validity of the choice of law principle upon which the Indexing Standard is based, namely that it is the jurisdiction where the acknowledgement is taken that controls its legality, not the law of the jurisdiction in which the land is located. To my knowledge, no one disputes this, however, I am not aware of any Massachusetts statute or decision that confirms that interpretation.
Applying these standards to the question posed by the title company, I would conclude that since a remote electronic acknowledgement is legal in Virginia, a document acknowledged by that means in that state would be recordable in Massachusetts.
While we would record a document from Virginia that was remotely electronically acknowledged, a document acknowledged that same way in Massachusetts would be rejected. Massachusetts law makes no provision for electronic acknowledgements, either in person or remote. This is so despite our notary laws having just been updated by Chapter 289 of the Acts of 2016 which became effective January 4, 2017.
Although not expressly allowed, would a reasonable interpretation of the new law nevertheless permit electronic acknowledgements to be done in Massachusetts? Section 3 of that law defines acknowledgement as “a notarial act in which an individual, at a single time and place appears in person, before a notary public . . .” There is no ambiguity there. “In person” means just what it says, so remote electronic acknowledgements are clearly prohibited.
But what of an “in person” electronic acknowledgement? Would that be legal in Massachusetts? While not expressly authorizing an in person electronic acknowledgement, Chapter 289 of the Acts of 2016 does not expressly prohibit it.
Section 4 of the new law (which amends M.G.L. c.222, s.8) directs the notary to type his name directly beneath his signature “and affix thereto the date of the expiration of such person’s commission . . .” No problem doing all of that electronically. But the next section requires the notary to have an official seal or stamp and describes what information should be contained on it. While this section does not explicitly require the notary to affix the stamp to the acknowledgement, another section of the law that prescribes the form of the acknowledgment includes a line that is labeled, “official signature and seal of notary public.”
So is a seal required for a valid acknowledgement? The same section of the law that requires the notary to have a seal also states “failure to comply with this section shall not affect the validity of any instrument . . .” and the Deed Indexing Standards state the registry of deeds will record a document even if the acknowledgement does not contain a seal. While omitting the seal from an acknowledgement might cause the notary to run afoul of the new statute, a document lacking a seal would still be valid and could still be recorded.
Still, the wisest course would be to address electronic acknowledgements legislatively and to do so sooner rather than later. As the real estate industry moves aggressively towards transactions that are entirely paperless, Massachusetts registries of deeds and the conveyancing bar should strive to keep pace.
A regular and welcome contributor to REBA News, Dick Howe has served as register of deeds in the Middlesex North Registry since 1995.  He is a frequent commentator on land records issues and real estate news.  Dick can be contacted by email at richard.howe@sec.state.ma.us.

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