Note: PowerPoint and audio for the December 17, 2015 Webinar, Basic - - PowerPoint PPT Presentation

Note:

PowerPoint and audio for the December 17, 2015

Webinar, “Basic Manual: Organization, Changes, Reorganization, Favorite and Little Known Rules” is now available on our website.

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ADDITIONAL HOUSEKEEPING INFORMATION

Because of opinions expressed by the Texas Insurance Department concerning rebates, legal credit is available only to:  Attorneys who own title agencies that are Stewart Title Guaranty Agents  Attorneys employed by a title insurance agent licensed with Stewart Title Guaranty or Stewart entities  Fee attorneys who have an Escrow Officer license through a Stewart Title Agent or Stewart entity If you are claiming legal credit for this web conference, please provide in your email which category you are in.

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We welcome any other lawyers to listen, but cannot provide continuing education credit to you.

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ACKNOWLEDGE THE KNOWLEDGE!

Richard L. Black Associate Senior Underwriting Counsel Austin, TX

ACKNOWLEDGE THE KNOWLEDGE!

Acknowledgements, New Notary Law, Correction Documents, and Recording

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New Notary Law: The Final Chapter?

• TEX. GOV. CODE §406.001(a) effective 1/1/2016:
• -Texas notary public’s seal of office must contain

notary’s State-issued identifying number.

• -TEX. ADMIN. CODE §87.4: Inclusion of notary’s ID

number in the seal is required only with new/renewed notary commissions after January 1, 2016.

• -RECOMMENDED: Upgrade to a compliant seal now!

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What entitles a document to be recorded in the County Clerk’s records?

• -Statutory acknowledgment (short-form or long-form)

under Chapter 121, TEX. CIV. PRAC. & REM. CODE;

• -Jurat (“subscribed and sworn to before me”) under TEX.
• PROP. CODE §12.001(a); OR
• -Certification or apostille under TEX. PROP. CODE

§12.001(a), relating to public documents.

Recording of Documents

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What is the purpose and benefit of recording a real estate document?

• -Acknowledgement = entitlement to recording.
• - Recording = constructive notice versus actual notice.
• -Binding effect of unrecorded documents.
• -Multiple grantors.
• -Abstract of Judgment exception: Recording and

indexing.

Recordation and Notice

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According to TEX. CIV. PRAC. & REM. CODE §121.001:

• -For general purposes when done within Texas:
• -District Court clerk;
• -County Court judge or clerk;
• -Notary Public.
• -For general purposes when done outside Texas, but

within the United States or its territories: Basically the same.

Who Can Take Acknowledgements Part 1

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When done outside the United States or territories (CIV.

• PRAC. & REM. CODE §121.001):
• -U.S. State Department personnel (consul,

deputy consul, commercial agent, consular agent, commissioner,

• r charge d’affaires) accredited to and resident in the

country; OR

• -Notary Public or other official authorized to administer
• aths in the jurisdiction where acknowledgement is

taken.

Who Can Take Acknowledgements Part 2

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Military personnel anywhere in the world (CIV. PRAC. &

• REM. CODE §121.001):
• -Acknowledgement by U.S. service member or

member’s spouse can be taken by commissioned officer in any United States military service branch.

• -Presumption of acknowledgement’s regularity arises

when certificate shows officer’s rank and service branch.

• -No seal required.
• -TEX. GOV. CODE §602.005: Same for jurats.

Who Can Take Acknowledgements Part 3

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Federal penal/correctional institutions (18 U.S.C.A. §4004):

• -Acknowledgor can be any officer, employee, or inmate
• f the institution.
• -Acknowledgements can be taken by wardens and

superintendents, associate wardens/superintendents, chief clerks, and record clerks.

• -No fee/compensation is allowed.

Acknowledgements Taken in Federal Prison

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TDC or jail inmate may make a “unsworn declaration” in lieu of declaration, verification, or certification required by statute (TEX. CIV. PRAC. & REM. CODE §§132.001— 132.003).

• -Must be in writing and subscribed by declarant.
• -Prescribed statutory form of declaration must be used.
• -If inmate’s unsworn declaration is the equivalent of a

jurat, will it also serve as an acknowledgement?

Texas Prison/Jail Inmate’s Unsworn Declaration

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When is a Notary Public considered disqualified from taking an acknowledgement?

• -Party to the instrument or spouse of a party.
• -Financial interest in the transaction.
• -Participant in an entity who is a party.
• -Trustee/beneficiary under trust involved in

the instrument (including a Deed of Trust trustee!)

• -Agent/attorney-in-fact for another party in transaction.

Transactional Disqualification

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Notary public taking acknowledgement of a physically disabled person may sign for the acknowledgor (TEX.

• GOV. CODE §406.0165):
• -Disability of the requesting party must be severe

enough to prevent making personal signature or mark.

• -Notary’s surrogate signing must be done in the

presence of one disinterested witness.

• -Required statutory statement under the surrogate

signature identifies the witness and cites the statute.

Notary Public as Surrogate Signer

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Signer’s acknowledgement can be remote from notary by means of a “witness acknowledgment” (TEX. CIV.

• PRAC. & REM. CODE §§121.009—121.010):
• -Witness must sign the acknowledged document as

witness to the signer’s signing or to signer’s oral declaration of acknowledgment.

• -Witness later appears before notary, and notary makes

a statutory certificate of witness’ testimony to be attached in lieu of signer’s regular certificate of acknowledgment.

Witness Acknowledgement

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Instrument may qualify for recording based on handwriting evidence and notary’s statutory certification (TEX. CIV. PRAC. & REM. CODE §121.001).

• -Grantor and all witnesses must be dead, out-of-state,

whereabouts unknown, or legally incompetent.

• -Notary takes handwriting evidence by written deposition

from at least two disinterested persons which is incorporated into notary’s certificate attached to instrument for filing.

Proof of Instrument by Handwriting

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Federal and State of Texas “grants” are recordable without further acknowledgement or proof (TEX. PROP. CODE §12.006).

• -Attorney General’s Opinion No. WW-805 (2/18/1960): A

properly executed and authenticated deed from the Veterans Land Board of the State of Texas qualifies as a “grant” under this statute.

• -Also extends to land patents signed by the Governor of

Texas.

Acknowledgment Not Required

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Acknowledgement lacking notary seal is NOT invalid when taken in another U.S. state where use of seal is not required (TEX. PROP. CODE §12.001 & TEX. CIV. PRAC. & REM. CODE § 121.004).

• -TEX.GOV. CODE §405.019 requires Texas Secretary of

State to distribute a list of other U.S. states and territories that require a notary seal (now on-line): http://www.sos.state.tx.us/statdoc/notary-seal-list.shtml

When Notary Seal Is Not Required

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Notary’s taking of acknowledgement requires photo + signature federal- or state-issued identification (TEX.

• CIV. PRAC. & REM. CODE §121.005).

Two statutory alternatives are allowed:

• -Foreign passport (but only in a “residential real estate

transaction”); or

• -Affidavit of credible witness known to the notary who

vouches for the identity of the acknowledgor.

Acknowledgor’s Required Identification

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What defects in the certificate of acknowledgement are “harmless error”?

• -Missing state or county name in caption;
• -Mistaken pronouns (e.g. “he” instead of “she”);
• -Missing date of acknowledgment;
• -Minor name variance, instrument vs. certificate; or
• -Variance between captions, instrument vs. certificate.

Acceptable Defects in Acknowledgements

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What defects in a certificate of acknowledgement are “fatal” to valid recordation?

• -Omission of acknowledgor’s name from certificate;
• -Significant name variance, certificate versus instrument;
• -Omission of word “acknowledged” in the certificate;
• -Notary’s/officer’s failure to sign the certificate;
• -Absence of seal when seal is applicable; or
• -Notary’s/officer’s disqualification evident on face.

Critical Defects in Acknowledgements

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If no suit raises the issue, a defective acknowledgement is considered “cured” after two (2) years in the real estate record.

• -TEX. CIV. PRAC. & REM. CODE §16.033(a)(8):

Coverage for defective acknowledgements added in 1993.

• -Statutory “cure” applies to EVERY instrument that fails

to show “an acknowledgement or jurat that complies with applicable law,” including complete lack of a certificate.

Statutory Limitations Applicable to Defective Certificates of Acknowledgement

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Three traditional approaches:

• -Original notary public corrects defect in the certificate of

acknowledgment, and affected instrument is re-filed; OR

• -Grantor re-acknowledges instrument before a different

notary public who attaches a new certificate, and affected instrument is re-filed; OR

• -Grantor executes full correction instrument with fresh

acknowledgement by same or different notary, which is filed to replace instrument with the defective certificate.

Correcting Defective Acknowledgements--Old School

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Under TEX. PROP. CODE §5.028(b), a Statutory Nonmaterial Correction Affidavit can be used to correct certificates of acknowledgement

• -Acceptable affiant is anyone who witnessed the

acknowledgor’s act of acknowledging instrument.

• -When acknowledgement was actually taken, Correction

Affidavit can address both either fatal or non-fatal defect.

• -When NO acknowledgment actually taken? MATERIAL

defect falls under §5.029, requiring traditional cure.

Correcting Defective Acknowledgements--21st Century

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Please note the following information which will be posted on our TIP page

• You are responsible for reading and understanding P-28 and for maintaining and providing

your records to the TDI to renew your Escrow Officer license.

• Submit your request as soon as possible after completing this webinar, we date certificates

as of the date they are received by us.

• Make sure your information is correct when submitting. If incorrect information was e-

mailed, you may cross out the information and handwrite it on the certificate.

• Group/Multiple Certificate requests will be returned for resubmission - we can only accept

requests with one person / one webinar per e-mail.

• Do not include any attachments/sign-in sheets for certificate requests – we will not process

requests with extraneous materials but will return them to you.

• This course can only be used one time as long as it is current – it cannot be used in multiple

renewal periods. See P-28a7g.

• If you are licensed with multiple companies, your TDI License number will be left blank on

the certificate – TDI allows you to make multiple copies to fill in each employer/license information on separate certificates.

• Your certificate will be provided via e-mail.

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To Receive CE Credit

Each individual seeking credit hours must send their own certificate request to: CEcertificate@stewart.com

Please include the following information:

• This Presentation Name in the Subject Line – “Acknowledge

the Knowledge”

• In the body of your e-mail: Name of Participant;
• Presentation PASSWORD given at the end of the webinar;
• License Number Only (located on left side of Escrow Officer

Certificate of License – for example: License Number: 1234567-890123)

For Attorney CLE Credit also include:

• Texas State Bar Number
• Affiliation with Stewart

– Employed by Stewart Title Guaranty Company; – an affiliate; or – a Stewart agent

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If you haven’t received your certificate within 10 business days, please contact: CEcertificate@stewart.com

You can access the full webinar materials 10 business days after the webinar at: www.stewart.com/texas

under the “Texas TIPS” tab

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Next Month’s Texas TIPS Online presentation is

February 18, 2016 “How To Be A Title Detective”

presented by: Bill Pratt For Questions/Comments Email john.rothermel@stewart.com

• r

heidi.junge@stewart.com

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