By Mary Kate Kelley—Whether your work comes mainly from signing service companies or your own contacts, as an independent notary signing agent (NSA), you may find yourself signing as many contracts as assignments you get. It is very important that you read and understand every word of each contract you receive. Contracts are not all alike, and they usually are not written to benefit you.
A commonly overlooked contract detail is a clause stipulating the circumstances under which you will or will not be compensated, usually referred to as a nonpayment clause. Some closing companies or lenders would have you believe that they are not required to pay you for your NSA services if the loan doesn’t get funded or they don’t get money from the loan.
For example, let’s say a couple signs all their mortgage paperwork in your presence; you send the paperwork in; and within three days, the couple exercises their right of rescission. In other words, they change their minds during the cooling-off period afforded them by law. The lender refuses to pay either you or the signing service that hired you because they didn’t get money from the deal. This might be seen as reasonable in some situations. However, your compensation as an NSA cannot depend on whether the loan goes through. If it did, you would have a direct or pecuniary interest in the transaction. And that’s a notary no-no.
Where to find the devil in your contract. A good signing service company will not have a nonpayment clause in its contract at all. If you work directly with lenders or settlement companies, count on seeing that clause a few times in your career. It may be obvious, or it may be hidden. Usually you’ll find it under the heading “Payment Terms” or “Cancellation Clause.” Or you may find it in a long paragraph of fine print. That’s why it is very important that you read the entire contract.
What to do with it. If you are presented with a contract containing a non-payment clause and you want to sign it anyway, you can void the clause by drawing a line through and initialing it before signing. Upon receiving the altered contract back, the company may choose not to do business with you. Then again, they may accept the contract as amended. It is up to you to decide if you want to do business with no guarantee of payment.
(In fact, you can void any stipulation that is unreasonable or that puts you at a contractual disadvantage. A stipulation that states a defined grace period, an elapse of time between your request for reimbursement and its payment, is not generally unreasonable. A grace period that is more than 30 days, vaguely stated or open-ended may be considered unreasonable. A stipulation of the company’s right to modify or deviate from the promised schedule of payment is unreasonable.)
How to avoid it. The best advice is to seek out signing service companies that have set payment schedules, such as biweekly, written into their contracts. Stick with reputable companies. If you join an online discussion group, message board or forum, you can post questions about various signing service companies and take advantage of the experiences of veteran notary signing agents in your state and across the country. Many NSAs keep lists of companies they will and will not work for and are usually happy to share the information with newcomers to the field. There are dozens of free online forums out there. Using your favorite web browser, reference page or search engine, search on “notary signing agent discussion forum” (without the quotation marks).
If you have questions about contracts you have signed or are contemplating, we urges you to talk to an attorney.