Real Estate Crime
Notary Fraud Bill

California Assemblywoman Sharon Runner, R-Lancaster, has introduced a bill that would amend existing laws governing notaries to help combat real estate fraud.

California's AB 886

AB 886 Summary

Allows, among other things, a peace officer to seize a sequential journal of notarial acts from a notary public without a warrant, requires a thumbprint for all notarized documents and requires all notaries public to provide a physical address as their business address. Specifically, this bill:

1) Deletes the requirement for a search warrant when a peace officer requests surrender of the sequential journal of notarial acts (journal) from a notary public.

2) Deletes "personal knowledge" from the list of evidence taken into consideration when a notary public is establishing the identity of an individual, during the notarization process and makes conforming changes.

3) Deletes language which limits the requirement for a thumbprint if the document to be notarized is a deed, quitclaim deed or deed of trust affecting real property. Provides that a thumbprint is required for all notarized documents. Provides that failure to obtain the thumbprint is a misdemeanor.

4) Deletes the requirement for a search warrant when a peace officer requests surrender of the journal from a notary public. Provides that a notary public shall surrender the journal, immediately upon request, to a peace officer. Provides that failure to provide access of the journal to a peace officer is a misdemeanor.

5) Provides that nothing in current law, relating to notary publics, shall be construed to limit the authority of a peace officer to seize a journal as evidence of a crime.

6) Prohibits a notary public from using a post office box as his or her principal place of business or residence. Provides that willful failure to notify the California Secretary of State (SOS) of a change of address is punishable as an infraction by a fine of not more than $500.

7) Provides that a willful failure to notify the SOS of a name change is punishable as an infraction by a fine of not more than $500.

8) Allows the SOS to refuse to appoint any person as notary public or revoke the commission of any notary public upon a conviction of a felony or an offense of a nature incompatible with the duties of a notary public.

9) Provides that the SOS shall either refuse to appoint any person as notary public or revoke the commission of any notary public upon any of the following grounds:

a) Substantial and material misstatements or omissions in the notary public application;

b) Commission of any willful act involving dishonesty, fraud or deceit;

c) Commission of, among other things, an act of forgery, knowingly making false statements on a certificate or falsely acting as a notary public;

d) Conviction of any felony crime of moral turpitude;

e) Revocation or suspension of a professional license if this action was for dishonesty or for any cause
substantially relating to the duties or responsibilities of a notary public;

f) Willful failure to discharge fully any of the duties required of a notary public;

g) Willful failure to complete the acknowledgement at the time the notary's signature and seal are affixed to the document;

h) Willful failure to provide access to the journal; or,

i) Willful failure to report the theft or loss of the journal. Provides that a violation of any of these provisions is punishable by a civil penalty of up to $1,500. Provides that a negligent failure to discharge fully and faithfully any of the duties or responsibilities required of a notary public is punishable by a civil penalty of up to $750.

10) Provides that a notary public who has been served with notice of revocation by the SOS or a peace officer must disclose this information to any person requesting notarial services. Provides that failure to disclose this information is a misdemeanor.

11) Provides that all misdemeanors relating to the provisions governing notary publics shall be commenced within four years after discovery of the commission of the offense, or within
four years after the completion of the offense, whichever is later.

12) Provides that a peace officer may also enforce the provisions governing conduct of a notary public through the examination of, among other things, a notary public's books and records.

EXISTING LAW :

1) Provides that the SOS may appoint and commission notaries public in such a number as the SOS deems necessary for the public convenience.

2) Provides that a notary public that commits a felony or a violation of provisions relating to notaries public shall forfeit his or her commission.

3) Provides that it is a misdemeanor for a notary public to willfully fail to perform the required duties of a notary public or to willfully fail to keep the seal of the notary 4 under his/her direct and exclusive control.

4) Provides that a notary public shall require a thumbprint if the document to be notarized is a deed, quitclaim deed or deed of trust affecting real property. Provides that the journal of a notary public is the exclusive property of that notary public. Provides that the notary public shall not surrender the journal to any other person, except to a county clerk or to a peace officer, in response to a criminal search warrant signed by a magistrate and served upon the notary public by the peace officer.

5) Provides that a notary public shall notify the SOS by certified mail, within 30 days, of a change in the address of his/her principal place of business or residence.

6) Requires a notary public who changes his/her name to complete an application for name change form and file the application with the SOS.

7) Allows the SOS to refuse to appoint any person as notary public or revoke the commission of any notary public for, among other things:

a) Substantial and material misstatements in the notary public application;

b) Conviction of a felony or a lesser offense involving moral turpitude; or,

c) Failure to secure the sequential journal of official acts. Provides that a violation for any of these provisions is also punishable by a fine of up to $1,500.

8) Provides that a person is guilty of a misdemeanor if he/she:

a) Knowingly destroys any records belonging to the office of a notary public;

b) Influences a notary public to perform an improper notarial act is guilty of a misdemeanor; or,

c) Willfully fails to perform any duty required of a notary public.

9) Provides that the SOS may enforce the provisions relating to notary publics by examining pertinent documents relating to the official acts of the notary public.

10) Provides, when executing an instrument, a notary public must determine from personal knowledge or satisfactory evidence the identity of an individual claiming to have executed the instrument. Defines "personally knows" to mean having an acquaintance, derived form association with the individual, which establishes the individual's identity.

Fiscal Impact

According to the Assembly Appropriations analysis, the SOS estimates minor ongoing costs of about $60,000.

Comments

The author explains that this bill is necessary because notaries public are responsible to providing credibility to our property ownership rights via the notary seals. According to the author, however, notaries public are subject to minimal criminal sanctions despite their important role.

According to the co-sponsor, the Los Angeles District Attorney's Office (LADA), "Assembly Bill 886 would help make it easier for law enforcement agencies and district attorneys to investigate unethical and criminal notaries public."

This bill allows a peace officer to seize a notary journal without a search warrant. The author explains that this is necessary to prevent the destruction of the evidence, whenever law enforcement seeks a search warrant to seize the journal.

The author explains that there are no similar requirements in the law pertaining to other evidence that can be easily destroyed, such as controlled substances.

According to the LADA, a notary public would be required to provide the notary journal to a peace officer whenever there is probable cause to believe that a crime has occurred, the notary is guilty of a crime and the journal is evidence of this crime.

This bill prohibits a notary public from using a post office box as his or her place of business. Instead, the notary public must provide a physical address. According to the author, this is necessary to make it less difficult for law enforcement to find a notary public who is accused of a criminal act.

According to the LADA, this requirement will apply whenever a notary public must register, or re-register, with the SOS.

This bill extends the statute of limitations for notary public-related misdemeanors. According to the LADA, this extension is necessary because it is unrealistic to expect fraud cases to be investigated and have charges filed within one year.

Penal Code section 802(4) provides a 4-year statue of limitations for the misdemeanor crime of engaging in the business of a contractor without a license.

Analysis Prepared by : Manuel Valencia / JUD. / (916) 319-2334

AB 886 status:
AUTHOR(S) : Sharon Runner.
TOPIC : Notaries.
HOUSE LOCATION : SEN
+LAST AMENDED DATE : 06/01/2007
TYPE OF BILL : Active
Non-Urgency
Non-Appropriations
Majority Vote Required
State-Mandated Local Program
Fiscal
Non-Tax Levy
LAST HIST. ACT. DATE: 06/07/2007
LAST HIST. ACTION : In Senate. Read first time. To Com. on RLS. for assignment.
COMM. LOCATION : ASM APPROPRIATIONS
COMM. ACTION DATE : 05/31/2007
COMM. ACTION : Do pass as amended.
COMM. VOTE SUMMARY : Ayes: 17 Noes: 00 PASS
Title: An act to amend Sections 1185 and 1189 of the Civil Code, and to amend Sections 6203, 8201.1, 8202, 8206, 8213.5, 8213.6, 8214.1, 8214.15, 8214.2, 8221, 8225, 8228, and 8228.1 of, and to add Sections 8214.21, and 8214.23 to, the Government Code, relating to notaries.
Bill analysis:
Assembly floor, June 4, 2007
Assembly committee, May 22, 2007
Assembly committee, April 23, 2007
Votes:
Assembly floor, June 6, 2007
Assembly committee, May 31, 2007
Assembly committee, April 24, 2007
Bill history:
2007:
June 7: In Senate. Read first time. To Com. on RLS. for assignment.
June 6: Read third time, passed, and to Senate. (Ayes 78. Noes 0. Page
June 4: Read second time. To third reading.
June 1: From committee: Amend, and do pass as amended. (Ayes 17. Noes 0.)
May 1: Re-referred to Com. on APPR.
Apr. 30: Read second time and amended.
Apr. 26: From committee: Amend, do pass as amended, and re-refer to Com. on
Apr. 12: Re-referred to Com. on JUD.
Apr. 10: From committee chair, with author's amendments: Amend, and re-refer
Apr. 9: Referred to Com. on JUD.
Feb. 23: From printer. May be heard in committee March 25.
Feb. 22: Read first time. To print.
Bill language:
Bill Number: AB 886 Introduced
Bill Text Introduced by: Assembly Member Sharon Runner
22 Febuary 2007
An act to amend Section 8216 of the Government Code, relating to notaries.

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