Indiana Now Requires Separate ‘Proof’ to Record Due to Unintentional Error in Bill

July 2, 2020

Indiana now requires a second “proof” in order to record a document due to an unintentional drafting error when making a last-minute change to a bill.

When modifying Senate Enrolled Act 340, an “or” was deleted and an “and” was added in its place.

Two notarizations—the acknowledgement and a proof—are now required on each paper or electronic instrument submitted for recording. The change goes into effect July 1.

In a statement, Indiana Land Title Association (ILTA) President Kurt Laker said ILTA has retained law firm Krieg DeVault to represent the association in a potential suit against the state with the hope of preventing SEA 340 from being enforced.

“In the case of SEA 340, the relevant bill language was consistent and correct throughout the normal process through both chambers of the General Assembly, where we have some sort of a seat at the table,” Laker said. “The change from ‘or’ to ‘and’ was made in conference committee, the last stop before the act goes to the governor. It is not a public process, and changes during this process are very rare. We believe this change was made at the last minute, behind closed doors, without an understanding of the effect it would have on the law and without the association having a real opportunity to weigh in.”

Laker added that, to ILTA’s knowledge, no other trade associations were aware of this issue and that ILTA had no reason to believe the proponents of the amendment understood the legal impact of the change or intended that recorded documents should now contain an additional “proof.”

“In short, this was a drafting mistake, and one that did not originate from ILTA,” Laker said. “There is widespread agreement and cooperation among interested trade associations to take remedial action now, and ILTA is grateful for their support and partnership as we work to correct this problem. Nevertheless, the potential impact of the law is real, and the association is taking the lead in the efforts to correct the problem.”

Closings with a mobile notary can still occur, but a disinterested witness must be present to witness the execution of any recordable instrument and must sign the instrument with a notarial officer completing a notarial certificate related to that witness to have a proper Proof. In addition, remote notarizations can be completed if a disinterested witness is present through audio visual communication to witness the execution of any recordable instrument. The witness must electronically sign the instrument with a RON notarial officer completing the related notarial certificate to that witness to have a proper proof. 

To help its members, ILTA developed this FAQ. Title and settlement agents are encouraged to reach out to their underwriters with questions about how this may affect execution of recorded documents.

Contact ALTA at 202-296-3671 or [email protected].