The government is in “active talks” with the Notarial Council to enhance the level of protection of contracting parties by improving the use of digital technology and real-time registration systems, the Justice Ministry has said.
Online payment of property taxes and registration fees have been identified by the council as the solution to protecting clients from the situation whereby notaries, entrusted with their funds, could default.
The electronic ‘ecosystem’ avoids having to pass money for property purchases through third parties, including notaries, who would no longer hold funds for clients but would still be responsible for the transactions concluded before them.
How can we be protected from defaulting notaries?
But the real-time element of the proposed project – important for sellers to be sure the money has been passed on before the contract is signed – is still lagging due to limited banking infrastructure and investment, council president Clinton Bezzina had told Times of Malta.
Political direction was needed to get the banks to comply, Bellizzi had said in the wake of the Ivan Barbara case.
Some of the deceased notary’s clients were left in anxious limbo as to the whereabouts of their deposits on promise-of-sale agreements entrusted to him.
Without referring to specific cases, a Justice Ministry spokesperson pointed out that notaries have public obligations to the government and other legal and disciplinary obligations for which they are answerable to the Court of Revision of Notarial Acts and under criminal law.
The integrity of the profession was also supervised by the Notarial Council and they had civil obligations to the parties appearing before them.
“It is, therefore, clear that a regulatory framework is in place,” the ministry stressed.
Situations of abuse did not arise frequently, with only a handful of cases from among around 500 practising notaries over the years.
The Justice Ministry was asked if it was looking into the situation and had plans to provide remedies for these rare cases.
“Notaries are independent professionals and they are ‘public officers’ only in that they fulfil the function of drawing up, accepting, registering and keeping public deeds and other acts,” it explained.
In doing so, they also have certain tax collection obligations towards the tax authorities and are obliged to act impartially in respect of the parties contracting before them.
“They are not obliged to act as safe keepers of deposits on account of the price of property, but the practice of contracting a deposit at the stage of the promise-of-sale agreement for the transfer of immovable property has been in place for centuries,” the ministry said.
The parties often feel more secure leaving the payment on account in the hands of the notary – at least until the searches showing that the property belongs to the seller are done – than paying the deposit to the seller without the comfort of such searches.
It pointed out that the government does not enter into the merits of the agreements between the parties and the notary and plays no part in them.
“That being said, notaries must have one or more separate Notarial Deposit Accounts in which they are obliged to deposit all monies deposited with them in their professional capacity and to identify the persons to whom these belong.”
The Notarial Council is also in talks with the state advocate to come up with a “comprehensive set of amendments” to laws and procedures that would offer clients more protection in these circumstances.