SB90: SB90 Notaries Public; the modernization of certain legal, notarial, and court services using electronic means; provide

25 LC 52 0714 Senate Bill 90 By: Senators Tillery of the 19th and Albers of the 56th A BILL TO BE ENTITLED AN ACT To amend Article 3 of Chapter 19 of Title 15 and Article 1 of Chapter 17 of Title 45 of the1 Official Code of Georgia Annotated, relating to the regulation of the practice of law and2 general provisions regarding notaries public, respectively, so as to provide for the3 modernization of certain legal, notarial, and court services using electronic means; to allow4 an attorney to conduct a real estate closing for property in this state using electronic means5 under certain conditions; to clarify the definition of the prac tice of law; to provide for6 definitions; to prohibit witness-only closings; to prohibit the unauthorized practice of law;7 to provide for penalties, liability, remedies, relief, and class action lawsuits; to provide for8 legislative construction; to provide for legislative findings; to provide for certain notarial acts9 to be performed remotely using electronic means when certain requirements are satisfied; to10 provide for requirements and exemptions; to permit the use of an electronic seal of office;11 to provide for criminal penalties and civil liability, includin g compensatory and other12 damages; to provide for class action lawsuits; to provide for related matters; to provide for13 an effective date; to repeal conflicting laws; and for other purposes.14 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:15 S. B. 90 - 1 - 25 LC 52 0714 PART I16 Real estate closing using electronic means17 SECTION 1-1.18 The General Assembly recognizes that the Supreme Court of Georgia, in the exercise of its19 authority to govern the practice of law in this state, has issued several opinions addressing20 real estate closings and the practice of law, including, but not limited to, Formal Advisory21 Opinion No. 86-5 (86-R9) (May 12, 1989), Formal Advisory Opinion No. 00-3 (February 11,22 2000), In re: Formal Advisory Opinion No. 00-3 (November 10, 20 03), Formal Advisory23 Opinion No. 04-1 (August 6, 2004), In re: Formal Advisory Opini on No. 13-124 (September 22, 2014), UPL Advisory Opinion No. 2003-2 (April 22, 2003), and In re: UPL25 Advisory Opinion No. 2003-2 (November 10, 2003). The General Assembly finds that it is26 in the public's interest to c odify the ruli ngs of such opinions on what constitutes the27 unauthorized practice of law as it pertains to real estate closings in this state.28 SECTION 1-2.29 Article 3 of Chapter 19 of Title 15 of the Official Code of Georgia Annotated, relating to the30 regulation of the practice of law, is amended by revising Code Section 15-19-50, relating to31 "practice of law" defined, as follows:32 "15-19-50.33 (a) The practice of law in this state is defined as:34 (1) Representing litigants in court and preparing pleadings and other papers incident to35 any action or special proceedings in any court or other judicial body;36 (2) Conveyancing, including the transfer of ownership of real property located in this37 state or any act in a real estate closing that constitutes the practice of law;38 (3) The preparation of legal instruments of all kinds whereby a legal right is secured;39 S. B. 90 - 2 - 25 LC 52 0714 (4) The rendering of opinions as to the validity or invalidity of titles to real or personal40 property;41 (5) The giving of any legal advice; and42 (6) Any action taken for others in any matter connected with the law.43 (b) Nothing in paragraph (2) of subsection (a) of this Code section shall prohibit acts taken44 by an individual while solely representing himself or herself in the purchase or sale of real45 estate property located in this state."46 SECTION 1-3.47 Said article is further amended by adding new Code sections to read as follows:48 "15-19-50.1.49 As used in this article, the term:50 (1) 'In person electronic notarization' means a notarial act in which: the signatory appears51 in front of and is identified by the notary in the same physica l location at the time of52 notarization; the document is presented in a digital format and signed using an electronic53 signature; the notary witnesses the act of signing the document; and the notary uses an54 electronic seal and signature to notarize the document.55 (2) 'Real estate closing using electronic means' refers to the continuous, interconnected56 series of events through which title to real property located in this state is conveyed from57 one party to another party and includes all acts conducted in w hole or in part using58 electronic means as provided for in Code Section 15-19-50.2.59 (3) 'Security instrument' means any written document presented for recording for the60 purpose of conveying or creating a lien or encumbrance on real estate for the purpose of61 securing a long-term note secured by real estate.62 (4) 'Technology provider' mean s an individual or entity that o ffers the services of a63 tamper-evident technology for electronic notarial acts.64 S. B. 90 - 3 - 25 LC 52 0714 (5) 'Witness-only closing' means a real estate closing in which an attorney presides over65 the execution of deeds of conveyance and other closing documents but purports to do so66 merely as a witness and notary and not as someone who is practicing law.67 15-19-50.2.68 (a) Any witness-only closing shall be unlawful in this state.69 (b) An attorney conducting any real estate closing shall:70 (1) Be licensed and present in this state at the time of such closing;71 (2) Directly supervise and be responsible for the entirety of such closing, including all72 employees, agents, and contractors who assist the attorney with such closing;73 (3) Perform any and all duties otherwise required by law and by the rules and opinions74 of the Supreme Court of Georgia; and75 (4) Comply with subsection (c) of this Code section if conducting a real estate closing76 using electronic means.77 (c) In any real estate closing using electronic means, the par ticipants shall have the78 following duties:79 (1) The attorney shall:80 (A) Obtain consent from all participants to such closing, incl uding any mortgage81 lender, to the use of electronic means to facilitate such closing prior to such closing;82 (B) Utilize two-way audio-video communication technology that is sufficiently secure83 to prevent interference with the authenticity, integrity, and security of all documents for84 such closing;85 (C) Confirm the identity of any signatory through knowledge based authentication or86 the presentation of a government issued form of identification and credential analysis;87 (D) Ensure that two-way audio-video communication technology records such closing88 and that such recording contains the following:89 (i) The date and time of such closing, including any notarial act;90 S. B. 90 - 4 - 25 LC 52 0714 (ii) A description of the documents that are being notarized;91 (iii) An attestation that the attorney is physically located i n this state at the time of92 such closing; and93 (iv) A clear image of any government issued identification that was used to verify the94 identity of each participant;95 (E) Conduct only one real estate closing using electronic means at a time;96 (F) Certify that the copy of the electronic record is an accur ate copy of such record;97 and98 (G) Retain possession of all electronic documents, a copy of the audio-video recording,99 and other records of such closing for at least six years;100 (2) The witness shall:101 (A)(i) Be in the same physical location as the signatory, able to see, hear, and102 communicate with the signatory, and able to witness the signature; or103 (ii) Be present in this state and able to see, hear, and communicate with the signatory104 and witness the signature through two-way audio-video communication technology;105 (B) Witness the signatory sign the document; and106 (C) Immediately sign the document as a witness; and107 (3) The notary public shall:108 (A) Be the attorney conducting such closing and shall provide his or her bar number109 on each notarized document;110 (B) Be present in this state;111 (C) Be able to see, hear, and communicate with the signatory and witness the signature112 by being in the same physical location for an in person electro nic notarization or by113 using two-way audio-video communication technology for a real estate closing using114 electronic means;115 (D) Witness the signatory sign the document; and116 S. B. 90 - 5 - 25 LC 52 0714 (E) Immediately notarize the document using an electronic seal compliant with the117 provisions of Code Section 45-17-6.118 (d) Any person, including, but not limited to, a notary public , a technology provider, a119 mortgage lender or its affiliates, employees, agents, and attor neys, or an attorney or the120 attorney's employee or agent, that aids or abets another person in violating the provisions121 of this Code section shall, upon the first or second conviction, be guilty of a misdemeanor;122 provided, however, that, upon a third or subsequent conviction, such person shall be guilty123 of a felony, punishable by imprisonment of not less than one year nor more than five years,124 a fine of up to $5,000.00, or both."125 SECTION 1-4.126 Said article is further amended by revising subsection (a) of Code Section 15-19-51, relating127 to unauthorized practice of law forbidden, as follows:128 "(a) It shall be unlawful for any person other than a duly licensed attorney at law:129 (1) To practice or appear as an attorney at law for any person other than himself or130 herself in any court of this state or before any judicial body;131 (2) To make it a business to practice as an attorney at law fo r any person other than132 himself or herself in any of such courts;133 (3) To hold himself or herself out to the public or otherwise to any person as being134 entitled to practice law;135 (4) To render or furnish legal services or advice;136 (5) To furnish attorneys or counsel;137 (6) To render legal services of any kind in actions or proceedings of any nature;138 (7) To assume or use or advertise the title of 'lawyer,' 'atto rney,' 'attorney at law,' or139 equivalent terms in any language in such manner as to convey the impression that he or140 she is entitled to practice law or is entitled to furnish legal advice, services, or counsel;141 or142 S. B. 90 - 6 - 25 LC 52 0714 (8) To advertise that either alone or together with, by, or th rough any person, whether143 a duly and regularly admitted attorney at law or not, he or she has, owns, conducts, or144 maintains an office for the practice of law or for furnishing l egal advice, services, or145 counsel; or146 (9) To perform any act that constitutes the practice of law un der the law or under the147 rules and opinions of the Supreme Court of Georgia."148 SECTION 1-5.149 Said article is further amended by revising Code Section 15-19- 58, relating to injunctive150 relief, venue, procedure, and other remedies not curtailed, as follows:151 "15-19-58.152 ( a ) T h e A t t o r n e y G e n e r a l , a n y d i s t r i c t a t t o r n e y , Either t h e S t a t e B a r o f G e o r g i a , t h e153 Judicial Council of this state, or any organized bar association of this state is authorized to154 institute in the proper superior court of this state an action or actions seeking injunctive155 relief, civil penalties not to exceed $10,000.00 per violation, restitution for an ascertainable156 loss caused by such violation, and investigative costs, reasonable expenses, and attorney's157 and witness fees, against any person, firm, or corporation, when it determines after an158 investigation determines that such person, firm, or corporation:159 (1) Is engaged in the unauthorized or unlawful practice of law;160 (2) Reserved;161 (3) Is in In violation of Code Section 15-19-55 or rules promulgated by the Supreme162 Court, is orally or by in writing, for a consideration then or afterwards to be charged or163 received by himself or herself or another, offering or tendering to another person, without164 the solicitation of such other person, the services of an attor ney at law, resident or165 nonresident of this state, in order for the attorney to institu te an action or represent the166 person in the courts of this or any other state or of the United States in the enforcement167 S. B. 90 - 7 - 25 LC 52 0714 or collection by law of any claim, debt, or demand of any such person against another or168 is suggesting or urging the bringing of the action; or169 (4) Is engaged in the practice of seeking out and proposing to other persons that they170 present and urge through any attorney at law the collection of any claim, debt, or demand171 of such person against another.172 (b) The venue of any action authorized by this Code section sh all be determined by the173 constitutional and statutory provisions relating to cases in equity.174 (c) The hearing, interlocutory or final, and the trial of acti ons authorized by this Code175 section shall be governed by the laws of this state relating to injunctions, as shall appeals176 from orders or judgments therein.177 (d) In any action brought under this Code section, the final j udgment, if in favor of the178 plaintiff, shall perpetually enjoin the defendant or defendants from the commission or179 continuance of the act or acts complained of. Restraining orders or temporary injunctions180 may be granted as in other cases in which injunctive relief is sought. Any person who181 violates the terms of an injunction, judgment, or consent order entered under the provisions182 of this Code section shall forfeit and pay to the state a civil penalty of not more183 than $20,000.00 per violation of such injunction, judgment, or consent order, and184 investigative costs, reasonable expenses, and attorney's and witness fees.185 (e) This Code section and Code Section 15-19-57 shall not repeal or curtail any remedy186 provided in cases of unauthorized or unlawful practice of law, and nothing contained in187 these Code sections shall be construed as abridging the powers o f t h e c o u r t s i n s u c h188 matters."189 SECTION 1-6.190 Said article is further amended by revising Code Section 15-19- 60, relating to consumer191 action for damages for violations, as follows:192 S. B. 90 - 8 - 25 LC 52 0714 "15-19-60.193 Any consumer who is a party to a one-to-four family residential real estate transaction or194 a consumer debtor or a trustee of a consumer debtor in a bankruptcy case that involves a195 one-to-four family residential real property who is damaged by a violation of this article196 or a violation of the Supreme Court's rules or opinions governing the unlicensed practice197 of law shall be entitled to maintain a civil action to recover damages, treble damages,198 reasonable attorney's fees, and expenses of litigation. A claim for a violation of this Code199 section shall be asserted in an individual action only and shall not be the subject of a class200 action under Code Section 9-11-23. This Code section shall not prevent the activities201 authorized by Code Section 15-19-52, 15-19-53, 15-19-54, 15-19-59, or 43-40-25.1.202 (a) Any buyer, seller, or borrower that is or was a party to a residential or commercial real203 estate closing in which any person involved in such transaction engaged in conduct204 constituting the unauthorized or unlawful practice of law or a class of such plaintiffs shall205 be entitled to maintain a civil action to recover damages. Such damages shall include, but206 not be limited to:207 (1) Actual monetary losses incurred by the plaintiff or the class of plaintiffs as a result208 of a violation of the provisions this article, or $1,000.00 in damages for each such209 violation, whichever is greater;210 (2) Any expenses paid by the plaintiff or the class of plainti ffs for the services of any211 person or entity that violated the provisions of this article; and212 (3) De minimis or nominal damages incurred by the plaintiff or the class of plaintiffs as213 a result of a violation of the provisions of this article.214 (b) In addition to any other penalties provided for by law, if the court finds that the215 defendant willfully or knowingly violated the provisions of this article, the court may, in216 its discretion, increase the award to an amount equal to not mo re than three times the217 amount available under paragraph (1) of subsection (a) of this Code section. The court218 shall consider the frequency and persistence of noncompliance by the defendant, the nature219 S. B. 90 - 9 - 25 LC 52 0714 of such noncompliance, the extent to which such noncompliance w as intentional, the220 number of persons or sales impacted by the violation, the impact of the judgment, and the221 resources of the defendant.222 (c) Any person, including, but not limited to, a notary public , a technology provider, a223 mortgage lender or its affiliates, employees, agents, and attor neys, or an attorney or the224 attorney's employee or agent, that, while participating in a residential or commercial real225 estate closing, engages in conduct that constitutes the unauthorized or unlawful practice of226 law, knowingly aids and abets another person in committing such conduct, or otherwise227 violates the provisions of this article regulating real estate transactions shall be liable for228 damages resulting from such conduct.229 (d) When the loan agreement for a real estate transaction contains an arbitration clause and230 the mortgage lender or such lender's agent engages in conduct t hat constitutes the231 unauthorized or unlawful practice of law or an unlawful notarial act, the arbitration clause232 shall not be enforceable to the extent it restricts or excludes damages or remedies that233 would be available to the plaintiff in court, including the rig ht to participate in a class234 action.235 (e) The court may provide such equitable relief it deems neces sary or proper, including236 invalidating any security instrument in connection with the sale of the real estate property237 at issue executed in violation of the provisions of this article and enjoining the defendants238 from further violations of the provisions of this article.239 (f) In a successful action to enforce the provisions of this a rticle, a court shall award240 plaintiffs costs, including reasonable attorney's fees. When a class of plaintiffs prevails,241 class counsel shall be entitled to the greater of one-third of the class's recovery or the242 number of hours billed at a reasonable hourly rate times a multiplier set by the court in its243 discretion, whichever is greater.244 (g) A person shall not be held liable for damages in any action brought under this article245 if the person shows by a preponderance of the evidence that the violation was not246 S. B. 90 - 10 - 25 LC 52 0714 intentional and resulted from a bona fide error notwithstanding the maintenance of247 procedures implemented to avoid such error.248 (h) A cause of action brought under this Code section may be f iled in any court of249 competent jurisdiction within this state without regard to the amount in controversy. Such250 cause of action shall be filed within one year from the date on which the violation occurred251 or the date of discovery of the violation, whichever is later.252 (i) This Code section shall not prevent the activities authorized by this article, Chapter 17253 of Title 45, and Code Section 43-40-25.1."254 PART II255 Notarization using electronic means256 SECTION 2-1.257 Article 1 of Chapter 17 of Title 45 of the Official Code of Geo rgia Annotated, relating to258 general provisions regarding notaries public, is amended by revising Code Section 45-17-9,259 relating to where notarial acts may be exercised, as follows:260 "45-17-9.261 (a) Notarial acts may be exercised in any county in the state, pr ovided that the notary262 public shall be physically located in this state and the notari al act is performed in the263 physical presence of the notary public as provided in subsection (b) of this Code section264 or is performed remotely as provided in subsection (c) of this Code section.265 (b) Any notarial act to be performed in the physical presence of the notary public shall take266 place in the same physical location and at the same time and close enough for the notary267 public to see, hear, communicate with, and exchange tangible id entification credentials268 with the individual whose act is being notarized.269 (c) Any notarial act to be performed remotely shall meet the following requirements:270 S. B. 90 - 11 - 25 LC 52 0714 (1) The notary public shall use real-time two-way audio-video communication271 technology that allows the parties to see, hear, and communicate with each other and is272 sufficiently secure to prevent interference with the authenticity, integrity, and security of273 the transaction, corruption or loss of the recording of the transaction, and unauthorized274 use of or tampering with the recording, record, and backup record;275 (2) The signatory shall be physically located in the United States or one of its territories276 or military bases or at a United States embassy, consulate, or diplomatic mission location277 and present evidence of his or her identity and location;278 (3) The notary public shall witness the signature;279 (4) The notary public shall document evidence of the acts provided for in paragraphs (1)280 through (3) of this subsection; and281 (5) The notarial act shall not be performed to:282 (A) Create or execute a will, codicil, or testamentary trust; or283 (B) Notarize the signature on any security instrument or docum ent executed for the284 conveyance of real property located in this state, whether or n ot such security285 instrument or document is recorded, except as provided for in Code Section 15-19-50.2.286 (d) A notary public may use an electronic seal of office to pe rform a notarial act as287 provided for in subsection (c) of this Code section or to perfo rm an in-person electronic288 notarization in a real estate closing using electronic means as provided for in Code289 Section 15-19-50.2. Such electronic seal of office shall compl y with the provisions of290 Code Section 45-17-6."291 SECTION 2-2.292 Said article is further amended by revising Code Section 45-17-20, relating to penalty and293 prosecution of violations of article, as follows:294 S. B. 90 - 12 - 25 LC 52 0714 "45-17-20.295 (a) Any person who violates subsection (d) of Code Section 45-17-8 shall be guilty of a296 misdemeanor or performs any notarial act without complying with the provisions of this297 article shall, upon a first or second conviction, be guilty of a misdemeanor; provided,298 however, that, upon a third or subsequent conviction, such pers on shall be guilty of a299 felony, punishable by imprisonment of not less than one year nor more than five years, a300 fine of up to $5,000.00, or both.301 (b) Any person who performs any notarial service without complying with the provisions302 of this article shall, upon the, including, but not limited to, a notary public, a technology303 provider, a mortgage lender or its affiliates, employees, agent s, and attorneys, or an304 attorney or the attorney's employee or agent, that aids or abets another person in violating305 the provisions of this article, including, but not limited to, directing the performance of an306 unauthorized notarial act, shall, upon a first or second conviction, be guilty of a307 misdemeanor and; provided, however, that, upon a third or subsequent conviction, such308 person shall be guilty of a felony, punishable by imprisonment of not less than one year nor309 more than five years, a fine of up to $5,000.00, or both."310 SECTION 2-3.311 Said article is further amended by adding a new Code section to read as follows:312 "45-17-21.313 (a) Any person, including, but not limited to, a notary public , a technology provider, a314 mortgage lender or its affiliates, employees, agents, and attor neys, or an attorney or the315 attorney's employee or agent, that, while participating in a residential or commercial real316 estate closing involving property located in this state, engages in conduct that constitutes317 an unlawful notarial act, knowingly aids and abets another pers on in committing an318 unlawful notarial act, or otherwise violates the provisions of this article regulating real319 estate transactions shall be liable for damages resulting from such illegal conduct.320 S. B. 90 - 13 - 25 LC 52 0714 (b) Any buyer, seller, or borrower that is or was party to a residential or commercial real321 estate closing involving property located in this state in which any person engaged in an322 unlawful notarial act or other violation of the provisions of t his article or a class of such323 plaintiffs shall be entitled to maintain a civil action to reco ver damages. Such damages324 shall include, but not be limited to:325 (1) Actual monetary losses incurred by the plaintiff or class of plaintiffs as a result of a326 violation of the provisions of this article, or $1,000.00 in damages for each such violation,327 whichever is greater;328 (2) Any expenses paid by the plaintiff or class of plaintiffs for the services of any person329 or entity that violated the provisions of this article; and330 (3) De minimis or nominal damages incurred by the plaintiff or class of plaintiffs as a331 result of a violation of the provisions of this article.332 (c) In addition to penalties provided for in this article, if the court finds that the defendant333 willfully or knowingly violated the provisions of this article, the court may, in its334 discretion, increase the award to any amount equal to not more than three times the amount335 available under paragraph (1) of subsection (b) of this Code section.336 (d) When the loan agreement for a real estate transaction contains an arbitration clause and337 the mortgage lender or such lender's agent engages in conduct that constitutes an unlawful338 notarial act, the arbitration clause shall not be enforceable t o the extent it restricts or339 excludes damages or remedies that would be available to the plaintiff in court, including340 the right to participate in a class action.341 (e) The court may provide such equitable relief it deems neces sary or proper, including342 invalidating any security instrument executed in violation of C ode Section 45-17-9 in343 connection with the sale of the real estate property at issue a nd enjoining the defendants344 from further violations of the provisions of this article.345 (f) In a successful action to enforce the provisions of this article, a court shall award the346 plaintiff costs, including reasonable attorney's fees. When a class of plaintiffs prevails,347 S. B. 90 - 14 - 25 LC 52 0714 class counsel shall be entitled to the greater of one-third of the class's recovery or the348 number of hours billed at reasonable hourly rate times a multiplier set by the court in its349 discretion, whichever is greater.350 (g) A cause of action brought under this Code section may be f iled in any court of351 competent jurisdiction within this state without regard to the amount in controversy. Such352 cause of action shall be filed within one year from the date on which the violation occurred353 or the date of discovery of the violation, whichever is later."354 PART III355 Effective date and repealer356 SECTION 3-1.357 This Act shall become effective upon its approval by the Governor or upon its becoming law358 without such approval.359 SECTION 3-2.360 All laws and parts of laws in conflict with this Act are repealed.361 S. B. 90 - 15 -