BILL ANALYSIS �
SENATE JUDICIARY COMMITTEE
Senator Noreen Evans, Chair
2011-2012 Regular Session
AB 2326 (Wagner)
As Introduced
Hearing Date: June 26, 2012
Fiscal: Yes
Urgency: No
BCP:rm
SUBJECT
Execution of Documents
DESCRIPTION
Existing law allows a person who witnessed another sign a
document (a "subscribing witness") to appear before a notary
public on behalf of a document signer under specified
circumstances. This bill would generally prohibit the use of a
subscribing witness for all instruments affecting real property,
as specified.
This bill would additionally require the notary to obtain the
thumbprint of a party signing a document to be notarized that
affects real property.
BACKGROUND
The Secretary of State may appoint and commission notary publics
in such numbers as he or she deems necessary for the public
convenience. To be qualified, the person must be a resident of
the state, at least 18 years old, pass a written examination,
and clear a background check.
Generally speaking, in order for a document to be notarized, the
person seeking notarization of a document must personally appear
before the notary, present adequate identification, and sign the
document in the notary's presence. Existing law contains an
exception to that requirement for certain documents which allows
a subscribing witness to appear, on behalf of the signer, to
attest that the signer has signed the document. This bill seeks
to narrow that exception by specifically prohibiting the use of
(more)
AB 2326 (Wagner)
Page 2 of ?
a subscribing witness for documents affecting real property.
This bill would additionally require the notary to obtain the
thumbprint of a party signing a document to be notarized that
affects real property.
CHANGES TO EXISTING LAW
1. Existing law provides that before certain documents can be
recorded, the execution of those documents must be
acknowledged by the person executing them and the
acknowledgment certified as prescribed by law, except as
specified. The execution of these instruments can be proved
by a subscribing witness, as specified, except for any power
of attorney, quitclaim deed, grant deed other than a trustee's
deed or deed of reconveyance, mortgage, deed of trust, or
security agreement. (Gov. Code Sec. 27287.)
This bill would add documents affecting real property to the
list of documents whose execution cannot be proved by a
subscribing witness, except as specified.
2. Existing law prohibits a proof of execution, by use of a
"subscribing witness," of any of several types of specified
documents, including a power of attorney, grant deed,
mortgage, deed of trust, quitclaim deed, or security agreement
as it relates to the recording of transfers of property. (Civ.
Code Sec. 1195.)
This bill would additionally prohibit a proof of execution by
a subscribing witness of any instrument affecting real
property, as specified.
3. Existing law requires a notary public to keep one active
sequential journal at a time, of all official acts performed
as a notary public. (Gov. Code Sec. 8206(a).)
Existing law provides that if the document to be notarized is
a deed, quitclaim deed, deed of trust affecting real property,
or a power of attorney document, the notary public shall
require the party signing the document to place his or her
right thumbprint in the journal. (Gov. Code Sec.
8206(a)(2)(G).)
This bill would expand the above requirement by additionally
AB 2326 (Wagner)
Page 3 of ?
providing that a notary public must require a party signing
documents affecting real property to place his or her
thumbprint in the journal.
COMMENT
1. Stated need for the bill
According to the author:
This bill seeks more consistency in the notarization of
documents; to
(a) expand the category of documents for which the
subscribing witness notary procedure would be prohibited,
and to (b) expand the category of documents for which the
notary must obtain a thumbprint in the notary from the
signer.
A "subscribing witness" is a person who witnesses the
signing of a document and appears before a notary public on
behalf of the principal signer to attest that the principal
signer has signed the document.
Although current law prevents the use of a subscribing
witness as proof of signing on powers of attorney and
specific real property documents (e.g., grant deed,
quitclaim deed, deed of trust, mortgage, or security
agreement; trustee's deeds and deeds of reconveyance are
specifically excluded from the requirement, an exclusion
this bill intends to remain), a subscribing witness can
currently be used when notarizing other real estate
documents (e.g., easement deed, memorandum of lease,
assignment of deed of trust, assignment of rents, and all
other real estate-related documents except trustee's deeds
and deeds of reconveyance) that could be later used to
fraudulently sign multiple real property documents.
2. Subscribing witnesses
Existing law prohibits the execution of several types of
documents, including a power of attorney, grant deed, mortgage,
or deed of trust, by use of a subscribing witness. Those
witnesses appear before the notary to attest to the fact that
the signature on the document to be notarized is genuine. This
bill would add "any instrument affecting real property" to the
list of documents for which use of a subscribing witness is
AB 2326 (Wagner)
Page 4 of ?
prohibited. As a result of that change, this bill would require
a party signing a document affecting real property to actually
appear before the notary public. The author, in support of the
need for the change, asserts:
Notaries report substantial concern about the potential for
fraud when asked to notarize a document under the
subscribing witness exception to personal appearance.
Personal appearance before a notary public is a greater
deterrent to fraud than allowing notarization without
personal appearance. Notaries are widely available in
California, thus a circumstance where an individual would
need to have a signature notarized and find the subscribing
witness procedure to be the only one available would be
rare; because of the lack of personal appearance before the
notary, signature by subscribing witness presents a greater
risk than benefit.
The California Escrow Association (CEA), in support, asserts
that "AB 2326 seeks to prohibit the use of the subscribing
witness for all real estate documents (including but not limited
to an assignment of a deed of trust, substitution of trustee,
declaration of homestead, memorandum of lease, etc.), while
preserving the current exception for a trustee's deed or deed of
reconveyance." CEA contends that "�f]urther limiting the use of
the subscribing witness will create an additional barrier to
real estate fraud and elder financial abuse."
3. Thumbprints
Notaries public are required to keep a sequential journal and
must have a party place his or her thumbprint in the journal
when signing a deed, quitclaim deed, deeds of trust affecting
real property, or a power of attorney document that is to be
notarized. This bill would generally expand that requirement
for a thumbprint to documents affecting real property, thus,
providing greater accountability for individuals who appear
before a notary to sign those documents. The author further
notes:
Notaries indicate that requesting a thumbprint in the notary
journal acts creates an additional cautionary signal to the
signer, thereby serving as a fraud deterrent. A consistent
requirement for the right thumbprint of the signer will
clarify the circumstances under which a thumbprint is
AB 2326 (Wagner)
Page 5 of ?
required and will be a greater deterrent to crime.
Additionally, the notary journal can be used as a source of
evidence for law enforcement authorities; obtaining a
thumbprint in the notary journal for all real estate
documents may assist in the identification and prosecution
of fraudsters.
The National Notary Association, in support, further states that
"the bill also will help Notaries comply with statutory
requirements. Knowing that all - and not some - real estate
documents require journal thumbprints and may not be proved by
subscribing witness will make it more likely that Notaries will
follow the law."
Support : National Notary Association; California Land Title
Association
Opposition : None Known
HISTORY
Source : California Escrow Association
Related Pending Legislation : None Known
Prior Legislation : None Known
Prior Vote :
Assembly Business, Professions and Consumer Protection Committee
(Ayes 8, Noes 0)
Assembly Appropriations Committee (Ayes 16, Noes 0)
Assembly Floor (Ayes 72, Noes 0)
**************