Key Takeaways
- Commission revocation is a common penalty for notary misconduct
- Criminal charges may result from serious violations
- Notaries can face civil liability for damages caused
- Negligent notarization can result in lawsuits
- Errors and omissions insurance is recommended for protection
Penalties and Liability
Notary misconduct can result in serious consequences. Understanding potential penalties helps ensure you perform your duties properly.
Types of Consequences
Notary misconduct can result in:
| Type | Description |
|---|---|
| Administrative | Actions by state agencies |
| Criminal | Prosecution for crimes |
| Civil | Lawsuits for damages |
Administrative Penalties
Commission Actions
The State Treasurer may take various actions:
| Action | When Applied |
|---|---|
| Warning | Minor first-time violations |
| Suspension | Moderate violations |
| Revocation | Serious violations |
| Denial of renewal | Pattern of misconduct |
Grounds for Revocation
| Violation | Severity |
|---|---|
| Notarizing without personal appearance | High |
| Conflict of interest notarization | High |
| Criminal conviction (dishonesty) | High |
| Unauthorized practice of law | Moderate to High |
| Overcharging fees | Moderate |
| Failure to maintain journal | Moderate |
Criminal Liability
Some notary misconduct constitutes a crime:
| Criminal Act | Potential Charge |
|---|---|
| Falsifying a certificate | Forgery, fraud |
| Notarizing knowing signature is forged | Conspiracy to commit fraud |
| False statements in application | Fraud, perjury |
| Impersonating a notary | Criminal impersonation |
Criminal Penalties May Include
- Fines
- Imprisonment
- Restitution
- Criminal record
Civil Liability
Notaries can be sued for damages caused by their negligence or misconduct:
| Basis for Lawsuit | Example |
|---|---|
| Negligence | Failed to verify ID, forgery occurred |
| Breach of duty | Didn't perform proper procedures |
| Fraud | Knowingly participated in scheme |
| UPL | Gave legal advice that caused harm |
Damages That May Be Awarded
| Type of Damages | Description |
|---|---|
| Actual damages | Direct financial loss |
| Consequential damages | Indirect losses |
| Punitive damages | Punishment for egregious conduct |
| Attorney's fees | Opponent's legal costs |
Protection Through Insurance
Errors and Omissions (E&O) Insurance
| Feature | Details |
|---|---|
| Purpose | Protect against claims of negligence |
| Coverage | Legal defense and settlements |
| Required? | Not required but recommended |
| Cost | Varies by coverage amount |
Why E&O Insurance Is Important
Even careful notaries can make mistakes. E&O insurance:
- Pays for legal defense
- Covers settlements or judgments
- Protects personal assets
- Provides peace of mind
Best Practices to Avoid Liability
| Practice | Protection Provided |
|---|---|
| Follow all procedures | Demonstrates due diligence |
| Keep detailed journal | Evidence of proper process |
| Verify identity carefully | Prevents fraud claims |
| Refuse questionable requests | Avoids participation in schemes |
| Get E&O insurance | Financial protection |
| Stay current on laws | Ensures compliance |
On the Exam
Expect 2-3 questions on penalties:
- Administrative: Commission suspension or revocation
- Criminal: Possible for fraud, forgery
- Civil: Can be sued for damages
- Protection: E&O insurance recommended
What is the most common administrative penalty for serious notary misconduct?
Is errors and omissions (E&O) insurance required for New Jersey notaries?
A person is harmed because a notary failed to properly verify identity and a forged document was notarized. What type of liability does the notary face?
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