Notary · General

A notary's client is a real estate closing where the notary will receive a 2% referral fee from the title company for each signing they bring. Is this arrangement permitted?

Correct answer

This depends on state law and circumstances — many states prohibit notaries from receiving any undisclosed financial interest or kickback tied to the documents they notarise; arrangements creating financial incentives to notarise specific documents raise significant conflicts of interest and ethics concerns

  1. A Yes — notaries can receive referral fees from any source
  2. B This depends on state law and circumstances — many states prohibit notaries from receiving any undisclosed financial interest or kickback tied to the documents they notarise; arrangements creating financial incentives to notarise specific documents raise significant conflicts of interest and ethics concerns
  3. C Referral fees are permitted as long as they are kept secret
  4. D Only permitted for signings worth over $100,000

Why this is the answer

NOTARY CONFLICTS OF INTEREST: BASIC RULE: A notary should not notarise documents in which they have a direct financial interest; the notary's impartiality is the foundation of the role's legal value; REFERRAL ARRANGEMENTS: A 2% referral fee creates a direct financial incentive to steer signers toward specific title companies and to complete notarisations that benefit the paying company; many states explicitly prohibit notaries from receiving compensation tied to the underlying transaction rather than purely for the notarial act itself; DISCLOSURE: Even where technically permitted, undisclosed referral arrangements create ethical problems — signers should be able to assume the notary is impartial; PROHIBITED INTERESTS: Most states prohibit: notarising documents where you are a named party; notarising documents where you have a financial stake in the transaction; notarising documents for your employer in certain circumstances; PRACTICAL GUIDANCE: When in doubt about a conflict, decline and refer the signer to an uninterested notary.
Source: NNA Notary Training — Ethics, Conflicts of Interest

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