Monday, October 15, 2007

Conflict of Interest

An interesting question was posed today about what is considered a conflict of interest when notarizing a signature. The following is an excerpt from Michigan's Notary Public Act (In Michigan, you can not notarize for family members. I'm told that some states do allow this as long as there is no conflict of interest):

A notary public shall not perform any notarial act in connection with a transaction if the notary public has a conflict of interest. As used in this subsection, "conflict of interest" means either or both of the following:
- The notary public has a direct financial or beneficial interest, other than the notary public fee, in the transaction.
- The notary public is named, individually, as a grantor, grantee, mortgagor, mortgagee, trustor, trustee, beneficiary, vendor, vendee, lessor, or lessee or as a party in some other capacity to the transaction.
- A notary public shall not perform a notarial act for a spouse, lineal ancestor, lineal descendant, or sibling including in-laws, steps, or half-relatives.

What the statute DOESN'T cover is a situation where a legal conflict may not exist, but may still have the appearance of impropriety. Even the slightest appearance of a conflict (notarizing for a friend, boyfriend/girlfriend, co-worker) could draw a notary into an undesirable situation. Brenda Stone of TexNotary has a wonderful way with words. Here are her (unofficial) rules when notarizing for friends/family:

- If you have even the slightest blush of concern about conflict of interest, don't do it.
- If you have to ask a notary board--you are already conflicted, it's not worth it, don't do it.
- If there are two sides to "the story", don't do it.
- If the sight or mention of your name will tick someone off who MAY see the document later, don't do it.
- If you have to bend the rules even ever-so slightly, don't do it.
- If the person is always in some kind of dysfunctional mess, don't do it.
- If they often get crossways with others, don't do it.
- Getting a notary is cheap. Pay a few bucks now to save yourself a ton of worry later. Just remember, Murphy's Notary Law States: No notary's good deed goes unpunished. EVER.


Brenda Stone said...

Al, I'm flattered, thanks, but that's not the point of this comment. I just want to add that some states are indeed allowed to notarize for family members as long as they do not have a conflict of interest with the document being notarized. Texas does not patently disallow such acts.

There are some situations which do not create such a conflict of interest between friends or family members and the notary. However, if there's even a hint of concern by the notary in any permissive state which does allow such acts, just don't do it.

Alex Y. said...

I'm going to adjust the post a bit to reflect that some states do allow notarization for family members. But your point about even a hint of concern is valid under any circumstance.

workhard said...

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