Notaries to face tighter regulation

New amendments to the Notarial Act will require all notaries to open trust accounts within which they would deposit any funds that they would be handling on behalf of their clients.

This will mean that any creditors owed money by a notary would not be able to lay claim to funds belonging to the notary’s clients.

The amendments will amend the law governing notaries to reflect the responsibility they hold as both public officials and private professionals, parliamentary secretary for lands Jason Azzopardi said.

Azzopardi said the amendments introduce regulations that will restore the public's trust and confidence in the notarial profession. “While most of the notaries carry out their duties with integrity and diligence, there are some – which can be counted on one hand – who are giving the profession a bad name,” he said.

Azzopardi said the amendments were designed in full compliance and consultation with the Notarial Council. He expressed hope that the amendments come into force by the end of the year after being tabled for parliamentary discussion as soon as the summer recess is over.

Describing them as “the most-far reaching" amendments to the Notarial Act since its inception in 1927, Azzopardi said they will introduce more regulation for some 290 notaries.

Notaries will also be required to possess obligatory insurance to cover clients in instances of financial hardship. Penalties for breach of the law will be significantly increased from the current €11 to penalties of hundreds of euro. Other penalties will prohibit notaries from performing their duties.

In such instances, Azzopardi said the notary would be “partially incapacitated” and unable to perform normal notary duties and given six months within which to regularise their position. Should this fail to happen, the notary could have his or her warrant withdrawn permanently.

However he said that anyone wishing to re-sit the warrant exam to obtain the warrant anew would however be free to do so.

Azzopardi also added that those acts that notaries would be prohibited from publishing will be increased from four to ten, explaining that this amendment is intended to address questionable legal loopholes.

The law will also legally oblige all notaries to perform the necessary research in relation to their clients’ needs, while also specifying what this necessary research constitutes. ”Notaries will also be required to present detailed reports of their research and investigations to the clients,” he said, adding that this obligation can be waived by the client “only in writing.”

The amendments will also empower the Notarial Council to fashion a code of ethics for notaries, and review notaries’ acts to ensure compliance with the law.

The notary’s academic preparation will also be looked at, Azzopardi said. To become a notary, law students will be required to obtain a doctorate, and not simply a first degree and a diploma (Public Notary), as the situation currently stands.

This means that law students will need to complete the six-year L.L.D course, and will no longer have the option to work as notaries simply after completing their three-year L.L.B course.

Azzopardi added that sitting for a notary warrant exam will require two years of legal practice with a notary firm, and not simply one, as is currently the case. The warrant exam will now be based on a curriculum which will be prepared and made available from beforehand, he added.

The amendments come in the wake of complaints about notary Pierre Falzon, who was being investigated over fraud and later arrested in Spain over misappropriation of taxes paid on property contracts.

In February, Falzon was arrested in Marbella, Spain, on the strength of a European Arrest Warrant. The notary had not archived any contracts in the public registry since June 2000, meaning that clients who used his services since 2000 could access contracts related to properties bought or inherited after that year, as these are not available at the registry.

Some clients had even discovered that they had to pay the stamp duty on property acquired, as Falzon never forwarded this money to the government.

Falzon was released on bail in March following extradition to Malta. He faces charges of misappropriation and forgery appeared before Magistrate Doreen Clarke and charged with having left Malta during court proceedings.

UPDATED: Falzon has since contacted MaltaToday to object to the article's reference to his ongoing criminal court cases. He said that he was arrested for reasons differing from his Notarial duties

"I was arrested not because of anything concerning my Notarial profession but simply because I failed to appear in a court case even though  I had sent Medical Certificates to the competent authorities," Falzon said, and added: "I have not been accused or charged with anything since my return from Spain."

When inquiring about Falzon's situation, Senior Police spokesperson said that he was arrested on the strength of a European arrest warrant, after absconding to a foreign country when not authorised by a court where he was facing criminal proceedings. 

The spokesperson also said that the only reason that Falzon has not yet appeared in court so far since his extradition to Malta was purely a technicality as documents relating to his arrest in Spain as still being processed.

Meanwhile, police investigators are said to be pursuing “a number” of other reports forwarded to them by the notary’s former clients.