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Source of Title Blog

Acknowledgments in Ohio
by Robert Franco | 2011/10/14 |

In late 2001 the Ohio legislature passed a bill which included statutory forms of conveyance that contained a new acknowledgment clause.  Within a few months, prior to the effective date of the former bill, it introduced and passed a new bill making further changes.  There was some language related to the acknowledgments that was proposed, but never passed, that made its way in to subsequently recorded deeds.  Some seem to question the validity of these acknowledgments.  Whether they are valid or not depends on the precise language used, but they may be perfectly fine.

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The history of this little hiccup in our law is interesting.  It all stems from the change the Ohio legislature made in 2001 eliminating the two-witness requirement.  The two-witness requirement dates back to 1787, before Ohio officially became a state (in 1803) and it remained the law here for 214 years.

In the 1990's title companies began to get a little lax with their closings.  One person would close the loan and actually witness the signing, then later another "witness" was added in a feeble attempt to comply with the requirement.  This became particularly more common when title companies would send mobile notaries to a person's home to close a loan; they rarely ever sent two people and the second witness was added later back at the office.

Bankruptcy trustees became acutely aware of these "one-witness closings" and began seeking to set aside the mortgages leaving the lenders as unsecured creditors.  This scenario would inevitably result in a claim on the lender's title insurance policy.  In the late 1990's, it was obviously too late to correct all of the defective instruments.  Arguably, it was even impossible to tell which instruments were defective from their face.  So, the title industry (along with the lenders) lobbied for a change in the law.

On November 2, 2001, Governor Taft signed Sub H.B. 279 into law, which eliminated the two-witness requirement. It also contained a provision validating any prior non-conforming instrument prior to its effective date of February 1, 2002.  For more on the history of the two-witness requirement in Ohio, see In Deed - A Witness to Change in the Execution of Real Estate Documents

The problem with the acknowledgment clause was created in this bill as well.  The legislature decided to include new statutory forms for conveyances which included the following acknowledgment clause:

Executed before me on ______ day of _________________, by ________________ who under penalty of perjury in violation of Section 2921.11 of the Revised Code, represented to me to be said person.

Apparently, this conflicted with the acknowledgment form provided in ORC § 147.55, which provided the following "statutory short form acknowledgment" for an individual (and similar language for corporations, partnerships, fiduciaries, etc.):

The foregoing instrument was acknowledged before me this ______________ by _________________________.

Conveyances and encumbrances are required by ORC § 5301.01 to be "acknowledged by the grantor, mortgagor... before a... notary public..."  Under the Uniform Recognition of Acknowledgments Act, particularly ORC § 147.541, the words "acknowledged before me" have specific meaning; mainly that the person acknowledging appeared before the person taking the acknowledgment and he acknowledged that he executed the instrument.  Unfortunately, those words were absent from the new statutory forms.

The legislature quickly acted by introducing HB 470 in January 2002 as emergency legislation.  As introduced, it sought to do two things.  First, it would have eliminated the acknowledgment clause from the new statutory conveyance forms.  And second, it would have changed the statutory short forms of acknowledgment as follows:

The foregoing instrument was executed and acknowledged before me this (date) by (name of person acknowledged. acknowledging under penalty of violating section 2921.13 of the Revised Code).

But in the end HB 470 was passed to only accomplish the former - eliminating the acknowledgment clause in the new statutory forms for conveyances - it did not alter the statutory short forms of acknowledgment.  Thus the perjury language in the statutory conveyance forms and the reference to ORC § 2921.13 (Falsification) in the acknowledgment forms was completely left out.

The effective date of HB 470 was the same date as the effective date of  Sub H.B. 279.  Thus, what we were left with after the confusing morass of new law was the elimination of the two-witness requirement and new statutory forms for conveyances without any change to the acknowledgment clauses. 

Nevertheless, some deeds have been prepared with language substantially similar to the proposed language in HB 470 that never became law (here is one example):

Acknowledged and executed before me on the _____ day of __________, _____, by __________________, who under penalty of perjury in violation of Section 2921.11 of the Revised Code, represented to me, to be said person.

Because this language was removed from the bill before it was passed, some seem to believe that this form of acknowledgment is defective.  In my opinion, it is fine. It still contains the magic words "acknowledged... before me," and although it is different from the short form acknowledgment provided in ORC § 147.55, that section also provides that "the authorization of the forms in this section does not preclude the use of other forms."

However, the use of the acknowledgment as originally included in the statutory forms for conveyances, which merely states "Executed before me on...," would be an invalid acknowledgment because it does not use the word "acknowledged."  Simply put, "executed before me" does not have the same legal meaning as "acknowledged before me" as provided in ORC § 147.541, and "acknowledgment" is required by ORC § 5301.01.   

Just because the "acknowledged and executed before me" form above contains the extraneous reference to the perjury statute, I don't believe that it is invalid... it merely contains more than the law requires.  It is still clearly an "acknowledgment," which I believe complies with the current law in Ohio. 

If anyone has any other opinions or interpretations related to the issue, please feel free to comment.  Ultimately, whether the acknowledgment is insurable is an underwriting determination.   If there are any underwriting bulletins floating around please feel free to share their interpretation of these changes in the law.

[This blog is intended to provide information and spur discussion only and should not be construed as legal advice.]


 




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Categories: Abstractors, Attorneys, Notaries Public, Ohio Legislation, Title Problems

1518 words | 8447 views | 3 comments | log in or register to post a comment


Hague?
Ohio has incorporated the provisions of the Hague Conventions on notaries into  law by adopting the UNIFORM RECOGNITION OF (NOTARY) ACKNOWLEDGMENTS ACT of 1968 (Section 1 of ORC 147.32).  Unless the new statutes specifically overwrote and overturned their inclusion in th uniform state acts laws, it seems that the less-strict forms authorized under the international treaties still stand as valid when it comes to notary acts.  Did the new laws amend or overturn this specific provision?  
by William Pattison | 2011/10/17 | log in or register to post a reply

Not sure I understand...
It seems to me that the treaty would only be relevant in the case of foreign documents.  In that case, I believe Ohio would recognize the notarial acts of the foreign notary.   
by Robert Franco | 2011/10/17 | log in or register to post a reply

notaries

It's hard in a state-by-state analysis to be sure.  That may indeed be the case.  I've had mixed interpretations of this throughout California's 58 counties where one will interpret in one way and the next will accept what the last one rejected.  Oh, well.  It was a though...

 

 

 
by William Pattison | 2011/10/17 | log in or register to post a reply
Source of Title Blog

Robert A. FrancoThe focus of this blog will be on sharing my thoughts and concerns related to the small title agents and abstractors. The industry has changed dramatically over the past ten years and I believe that we are just seeing the beginning. As the evolution continues, what will become of the many small independent title professionals who have long been the cornerstone of the industry?

Robert A. Franco
SOURCE OF TITLE

 

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