Posting for

Wednesday, October 21, 1998

by: Stephen Farber

and: Michael Berey

mberey@faticony.com

NOTARY ACKNOWLEDGMENTS/DEFECTIVE DOCUMENTS/ESCROW AND CLOSING

(Following a recent posting on Defective Documents MikeBerey [Manhattan] forwarded a memo prepared by Stephen Farber [also in NY] concerning new requirements for notary acknowledgments in New York state--to be effective in 1999. Note there are different forms depending on whether signatures are taken within or outside the state. This isn't too complicated--but it's awfully important we use the right form on documents to be recorded in NY. If anyone isn't clear as to why this is so important, take a look at the story titled "Bankruptcy 101" from Essex, Vermont in "Covered Risk For Mortgage Lenders." This publication is viewable on First American's website--look for "News & Reference"/look for "Covered Risk For Mortgage Lenders." In that story, docs to be recorded in Vermont were notarized in NY--improperly--resulting in a total failure of title. Here's Stephen Farber's memo:)

As reported earlier, on July 8, 1997, the New York State Real Property Law was amended by Chapter 179 of the Laws of 1997 to add Section 309-a to Article 9 ("Recording Instruments Affecting Real Property"). Section 309-a authorizes the use of two new uniform forms of acknowledgment. There is a certificate of acknowledgment to be used when the person executing the subject document appears before the individual taking the acknowledgment. There is also a certificate for a proof of execution by a subscribing witness. Section 309-a provides that these forms are acceptable only when the acknowledgment to be taken is within the State of New York. Prior to September 1, 1999, county recorders are to accept for acknowledgments taken within New York both the forms previously in use under Real Property Law Article 9 and the new uniform forms. However, as of September 1, 1999, only the new uniform forms will be accepted for acknowledgements taken within New York State.

Section 309-a does not, however, specifically address the taking of acknowledgments without the State of New York. As a result, there has been confusion as to which forms could or should be used when taking acknowledgments outside of New York. The legislature, after learning of the ease of using the new uniform forms provided in Section 309-a, passed legislation enacted on September 23, 1998 as Chapter 596 of Laws of 1998 adding Section 309-b to the Real Property Law. The new section provides for the use of two new uniform forms when taking acknowledgments outside the State of New York. The forms are similar to those used in Section 309-a. There is a certificate of acknowledgment and a certificate for a proof of execution by a subscribing witness. The forms of acknowledgment to be used within and without of New York are attached to this memorandum.

There are important details to consider when reviewing Section 309-b. First, the date on which the uniform form certificate of acknowledgment and certificate for a proof of execution by a subscribing witness can be used outside of New York is January 21, 1999. Second, Section 309-b permits the use of these new uniform forms and Section 309-a requires the use after September 1, 1999 of the new uniform forms. Accordingly, under Section 309-b, county recorders will accept the existing forms and the new uniform forms. Third, the uniform forms provided for in Section 309-b can be used for the acknowledgments of signatures of a natural person or on behalf of an entity (e.g. corporation, limited liability partnership or trust).

Note should be made that Section 309-b does not modify other sections of the Real Property Law relating to the taking and authentication of acknowledgments outside of New York. In particular, this new section does not modify the choice of laws afforded by Real Property Law Sections 299-a, 301-a and 308. If the acknowledgment or proof is taken in a manner prescribed by the laws of a place other than New York, such acknowledgment or proof must be accompanied by a certificate that such acknowledgment or proof conforms to such laws. In addition, the individual, other than a Notary Public, taking the acknowledgment or proof outside New York must provide the requisite seal of his or her office. Section 309-b also does not change Real Property Law Section 300 (acknowledgment of person taken in the armed forces), and Real Property Law Sections 308, 311, 312 314 and 318 (relating to the authentication of acknowledgements).

Chapter 596 also deletes the phrase "a Notary Public in and for said State" from the uniform form of acknowledgment in Section 309-a. This amendment takes into consideration the fact that authorized individuals other than a notary public may take acknowledgments.

UNIFORM FORM CERTIFICATE OF ACKNOWLEDGMENT

(Within New York State)

State of New York )

County of ______ ) ss.:

On the ____ day of ________ in the year ____ before me, the undersigned personally appeared __________________________, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their capacity(ies), and that by his/her their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument.

_____________________________

Signature and Office of individual

taking acknowledgment

UNIFORM FORM CERTIFICATE OF

ACKNOWLEDGMENT

(Outside of New York State)

State, District of Columbia, Territory, Possession, or Foreign Country

___________________________________________ ) ss.:

On the __ day of _______ in the year _____ before me, the undersigned, personally appeared ___________, personally known to me or proved to me on the basis of satisfactory evidence to be the individual(s) whose name(s) is (are) subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their/ capacity (ies), that by his/her/their signature(s) on the instrument, the individual(s), or the person upon behalf of which the individual(s) acted, executed the instrument, and that such individual made such appearance before the undersigned in the _______. (Insert the city or other political subdivision and the state or country or other place the acknowledgment was taken).

(Signature and office of individual taking acknowledgment.)

UNIFORM FORM CERTIFICATE OF PROOF OF

EXECUTION BY A SUBSCRIBING WITNESS

(Within New York State)

State of New York )

County of ______ ) ss.::

On the ____ day of ________ in the year ____ before me, the undersigned personally appeared ________________________, the subscribing witness to the foregoing instrument, with whom I am personally acquainted, who, being by me duly sworn, did depose and say that he/she/they reside(s) in _________________________________ (if the place of residence is in a city, include the street and street number, if any, thereof); that he/she/they know(s) ________________________ to be the individual described in and who executed the foregoing instrument; that said subscribing witness was present and saw said ________________________ execute the same; and that said witness at the same time subscribed his/her/their name(s) as a witness thereto.

_____________________________

Signature and Office of individual

taking proof

UNIFORM FORM CERTIFICATE OF PROOF OF

EXECUTION BY A SUBSCRIBING WITNESS

(Outside of New York State)

State, District of Columbia, Territory, Possession, or Foreign Country

___________________________________________ ) ss.:

On the __ day of _____in the year ____before me, the undersigned, personally appeared _________, the subscribing witness to the foregoing instrument, with whom I am personally acquainted, who, being by me duly sworn, did depose and say that he/she resides in ___________(if the place of residence is in a city, include the street and street number, if any, thereof); that he/she knows ________ to be the individual described in and who executed the foregoing instrument; that said subscribing witness was present and saw said _______ execute the same; that said witness at the same time subscribed his/her name as a witness thereto; and that said subscribing witness made such appearance before the undersigned in ________. (Insert the city or other political subdivision and the state or country or other place in which the proof was taken.)

(Signature and office of individual taking proof.)

(End of Memo)