Two New Laws Impact Escrow Industry

by Cynthia Belzl, RBJ VP and Operations Officer

Two new laws go into effect January 1, 2015. The first involves added wording    to notarized documents and the other deals with documentary transfer tax disclosure requirements.

Wording Attempts to Clarify Notaries’ Guarantee

Signed into law August 15, 2014, California Senate Bill 1050 requires the following specific consumer disclosure, enclosed within a box, be added to all certificates of acknowledgment, proofs of execution of an instrument and jurats:

“A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.”

For more details visit:

http://www.nationalnotary.org/knowledge-center/news/law-updates/ca-senate-bill-1050

Documentary Transfer Tax is Out in the Open

Also effective January 1, 2015, the amount of documentary transfer tax due and the location of the property will be required to be shown on the face of all recorded documents that are transferring property. This is as result of California Assembly Bill 1888 that was signed into law on June 4, 2014.

In essence, this law deletes the wording that allows the amount of tax due, upon request, to be shown on a separate paper and affixed by the recorder after the permanent record is made.

From the Legislative Counsel’s Digest:

“The Documentary Transfer Tax Act authorizes the board of supervisors of a county or city and county to impose a tax with respect to specified instruments that transfer specified interests in real property. The act requires the amount of tax due and the location of the property to show on the face of the document, and if the party submitting the document for recordation requests, that the amount of tax due be shown on a separate paper affixed to the document. The act prohibits the recorder from recording any deed, instrument, or writing subject to the tax, unless paid at the time of recording, and requires a signed declaration of the amount of tax due on the face of the document or on a separate paper as provided by the act.

This bill would delete the requirement that, upon request, the amount of tax due be shown on a separate paper affixed to the document, and would make a conforming change to the signed declaration requirement.”

For the specific changes to Sections 11932 and 11933 of the Revenue and Taxation Codes, please visit:

http://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201320140AB1888&search_keywords=

To view the deleted wording from Section 11932 visit:

http://legiscan.com/CA/text/AB1888/id/963921