The Middlesex North
Registry of Deeds recently recorded a mortgage for property in Tyngsborough.
Like 75 percent of all mortgages we record, it arrived electronically. The
document was signed by the homeowners, likely at their kitchen table just a
dozen miles from the registry of deeds, but it was
Massachusetts General
Laws chapter 183, section 42 allows an acknowledgement made outside of
Massachusetts to be done before a justice of the peace or notary public of the
state in which the acknowledgement is made but neither MGL c.183, s.42, nor any
other Massachusetts statute or decision that I have found specifies whether the
validity of the acknowledgement is governed by Massachusetts law or by the law
of the place where the acknowledgement was taken.
The Restatement (Second)
of Conflicts of Law, section 223, states “(1) Whether a conveyance transfers an
interest in land and the nature of the interest transferred are determined by
the law that would be applied by the courts of the situs; and (2) These courts
would usually apply their own local law in determining such questions.” However,
this rule is not universal. Comment i.
Collateral questions to section 223 of the Restatement says that on matters
that are incidental or collateral to the conveyance, the courts of the state
where the land is located might apply the law of some other state to resolve
the matter. This is especially true “when the concern of that other state in
the decision of the particular issue is so great as to outweigh the values of
certainty and convenience which would be served by application of the local law
of the situs.”
Massachusetts Deed
Indexing Standard 2-6 [ http://www.lowelldeeds.com/IndexStnds08.pdf
] states “An acknowledgment made outside of the Commonwealth but within any
state, territory, district or dependency of the United States, shall be made
before: a justice of the peace, notary public, or magistrate of the state in
which the acknowledgment is made . . .” This standard assumes that it is the
law of the place where the acknowledgement is made that controls its validity.
It also delegates to the person accepting the document (the grantee, not the
registry) responsibility for determining whether the acknowledgement is valid
under the laws of that foreign jurisdiction.
When the person executing
the document and the notary acknowledging the execution of the document were
both located outside of Massachusetts, far from the land affected by the
document, these presumptions seemed valid. So did the expectation that courts in
this Commonwealth would hold that the acknowledgement was collateral to the
conveyance of the land and should therefore be assessed in light of the law of
the jurisdiction in which the acknowledgement was taken.
However, technology in
the form of internet-based audio-visual applications has brought a new twist to
this analysis by allowing the person executing the document to be distant from
the person taking the acknowledgement. In the case of our Tyngsborough mortgage
with the person executing the document being in Massachusetts and the land
being in Massachusetts, the use of a foreign notary seems like a kind of forum
shopping that implicates the financial interests of the lender more than public
policy concerns of the state of Texas. In these circumstances, a Massachusetts
court might conclude that any connection between this transaction and the state
of Texas was so tenuous that the entire transaction, including the
acknowledgement, should be governed by Massachusetts law. Since Massachusetts
law makes no provision for remote video acknowledgements, such a finding would
invalidate the acknowledgement, the mortgage itself and, if we may be guided by
U.S. Bank v Ibanez, 458 Mass. 637
(2011), quite possibly any other document similarly acknowledged.
Still, before we
reflexively shun all out-of-state remote acknowledgements, we should remember
that human nature makes us prone to accept the old and familiar and to reject
the new and innovative. If the purpose of requiring a real estate document to
be acknowledged is to be able to prove that the person who purportedly signed
the document did in fact sign it, having a video recording of that act is
better evidence than a notary testifying that he has no memory of this
particular transaction but always required the person executing the document to
be in his presence and to positively identify himself before completing the
acknowledgement. In that way, the Texas law may do more to protect the public
policy concerns of the Commonwealth than the state’s own notary laws do.
According to the National
Notary Association, 22 states have passed remote video acknowledgement laws. This
practice is reaching critical mass across the United States and we here in the
Commonwealth can no longer ignore it in the hope that it will just go away. As
tempting as it is to urge the state legislature to jump on board the remote
notary train without delay, this is a complex area of the law with enormous
implications that deserves prompt study and analysis by all concerned as a precondition
to legislative action.
Related
Articles
Here
are links to a couple of my earlier articles that are related to this one:
Electronic
Acknowledgements March 9, 2017
A Path to
Electronic Acknowledgements July 28, 2017
https://rebama.blogspot.com/2017/07/a-path-to-electronic-acknowledgements.html
