Notary Basics

What is a Notary?

A notary is a public official person whose job (amongst other things) is to witness the signing of important and legal documents.

By having a notary certify a document, the government can be confident the person signing the paper is the correct person, is competent and aware of the proceedings, and is signing under their own free will. They also make sure all tasks are carried out correctly.

To do this, a notary must carry out their job in the physical presence of the signer. However, some states now allow for a remote online notarization process, which we cover later in this article.

Notary laws vary state by state, but in general, you must meet the following basic requirements to become a notary in Alabama:

• be 18 years old or older;
• be a legal resident of your state;
• have no criminal convictions or felonies (unless a pardon has restored civil rights);
• not be currently a debtor in a bankruptcy proceeding;
• not be currently under an order adjudicating you incapacitated;
• provide a notary bond;
• complete an application approved by the state;
• purchase a notary stamp and a record book once you receive your notary commission from the state and
• take the oath of office.

From September 1st 2023, all notary applicants must successfully complete an approved Online Notary Public Training Course. The Alabama Probate Judges Association and the Alabama Law Institute provide this course.

Although an exam is not required, the applicant must complete this training within 30 days from the application submission date.

Notaries in real estate transactions

Real estate transactions involve numerous legal documents to be correctly executed and authenticated. A notary (or notarizing these documents) adds security, authenticity, and trust in real estate transactions, especially as the notary is an impartial witness.

Many believe the sole function of the notary is to ensure clients sign the documents during real estate transactions, but their work is much more diverse. The role of notaries in real estate transactions is critical in helping to prevent fraud, protect against identity theft, and ensure the legality and validity of the transaction.

Document execution

The primary purpose of notarization in real estate transactions is to establish the authenticity and validity of the documents involved. Documents that need notarization in real estate transactions can be complex and have significant financial obligations on the parties involved.

The notarization process helps to ensure that all parties are fully informed and entering into the agreement willingly, with a complete understanding of the consequences. Other documents within real estate transactions are often essential to the smooth running of the process. The notarization process helps to ensure their validity and legal standing.

Incorrectly executing documents can lead to delays, cancellations, and financial liability, which no one wants.

Verifying Identities and Signatures

Notaries need to ensure that the real estate documents are executed correctly. They need to verify the identities and signatures of the parties involved, so spotting a fake ID is an integral part of notarizing documents.

Usually, the notary will follow the guidelines the state sets on what types of identification are appropriate, but the ID needs to have a picture and a signature.

For example, in Alabama, ID documents that can be accepted include a U.S. passport, an Alabama identification card, or an Alabama driver's license.

If the state does not have guidance on identification, the best practice is to request a current ID that contains at least the signer’s photo, signature, and physical description. IDs that meet this standard include:

• any state’s driver’s license or non-driver’s ID;
• a passport;
• a federal ID or military ID;
• a state, county, or local government ID; and
• a permanent resident card or “green card.”

The notary must physically inspect the ID to make sure it is genuine. They need to check if it is the right design for the ID and examine the image and the physical description of the person present. The notary should ensure the ID is valid and has not expired - this is the first step to preventing fraud and protecting against identity theft.

Document authenticity

Ensuring the authenticity and validity of documents is crucial in real estate transactions. A notary will verify the identity of each client, their legal capacity, that they understand the document they are signing, and any potential consequences.

When a person buys a property, a real estate notary ensures that the seller and buyer perform the contract. By verifying the identity of signatories and ensuring their understanding of the document’s contents, a notary public confirms the authenticity and validity of the document. This verification process helps prevent fraud and provides evidence of the parties’ intentions.

Notarization adds a layer of trust and creditability to legal documents. It adds assurance that the document has been reviewed and verified by an impartial professional.

In the event of a legal dispute, notarization can serve as evidence of the authenticity of the document and the intentions of the signatories.

Recordkeeping and documentation

Many states in the U.S. either recommend or require that their notaries keep a record of all their notarial acts in a journal.

The key information included in a notary journal are:

• the date of notarization;
• the document date;
• the heading/title of the document type;
• the parties involved;
• the notarization venue;
• the type of notarization performed;
• if a verbal ceremony was performed;
• the fee involved;
• the property involved;
• the number of pages in the document;
• the signers’ identities and signatures;
• the method of identification; and
• the ID documentation used.

Notaries should write every journal entry when the signer is present before finalizing the notarization. If multiple deeds are notarized for an individual simultaneously, the notary should create a separate journal entry for each document.

This journal serves as proof of transaction if authenticated documents go missing, are altered, lost, or stolen, or this information is required for court proceedings.

A detailed notary journal also helps notaries defend themselves and their service as a notary from potential lawsuits and accusations of negligence.

Eliminating Fraud

By verifying identities and signatures and authenticating documents, notaries help eliminate many different types of fraud. Notaries help:

• protect against identity theft and identity fraud;
• prevent mortgage scams or scams targeting the elderly;
• ensure documents are signed willingly;
• ensure the signatories are of understanding capacity;
• prevent forgery of documents
• prevent misrepresentations; and
• other financial scams.

Notaries are successful at fraud deterrence because of the many steps and safeguards that are put in place for notarization to occur.

Remote Online Notarization (RON)

RON is notarizing a document remotely using electronic signature, identity verification, audio-visual communication, and electronic notarial journal and record-keeping technologies. The parties can conduct the act on their devices (as opposed to meeting) from any location if their state law allows them to do this.

There are many benefits to using RON, such as:

• convenience and accessibility – it eliminates the need to travel and allows you to access notary services from home;
• cost-effectiveness – it reduces travel costs and time, and costs for the notary;
• choice – it allows you to select from a more comprehensive number of notary publics;
• security – using enhanced fraud prevention and tamper-proofing technologies to make sure signatures are genuine and the notarized document has not been altered and
• traceability – there is an electronic audit trail documenting every step of the notarization process.

RON can be used in many different situations, such as:

• mortgage and property deeds;
• powers of attorney;
• contracts; and
• vehicle finance documents

Many states across the US recognize RON, but it is still a relatively new process with evolving laws and standards. For example, in the states where South Oak Title operates, RON is available in Tennessee and Florida but not in Alabama.

If you want to use RON, you must check with your state and local authority to ensure it applies to the type of document and transaction you are trying to complete.

Notaries at closing

A notary is a crucial part of a real estate closing process because they ensure all documents are signed correctly. This process can help avoid mistakes that could slow down or even cost the transaction. Real estate closing can take place either in-office or through mail-away closing.

In-office closing

An in-office closing is where all parties to the transaction attend a meeting. In this case, there is no need for a separate notary as your attorney or closer can serve as the notary and perform the notary duties necessary.

The notary will check the identification of the homeowners signing the closing documents and review the documents to ensure there are no mistakes. The notary will also explain the purpose of the papers to the signers, and once they are in order, the notary will witness the signings.

Upon completion, the notary will sign the documents and affix their seal, making them notarized and legally binding.

Mail away closing

Mail-away closing is an option when either the buyers or sellers of a property are not physically able to attend their closing appointment.

This process has some extra considerations which do not apply to in-house closings:

• documents must be mailed in advance to the mail away closer;
• once the documents are received, the client must sign them in front of a notary and
• the mail-away closer is responsible for mailing the documents to the closing attorney.

The title company will hire a vetted notary for an out-of-state closing. This is important to prevent fraudulent activities such as identity fraud and theft, misrepresentations, fraudulent signatories, and mortgage scams.