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Real Estate Transactions & Power of Attorneys

Updated: Oct 18, 2022

  • A POA, or Power of Attorney, can give an attorney in fact power to act on their behalf in a real estate transaction, however there are important limitations as to when they can and should be used.

  • A POA, or Power of Attorney, is a legal document that allows someone else (referred to as agent or attorney in fact) to act on your behalf (referred to as the principle) in a specific capacity.

When can a POA be used?

· A POA's use should be reserved for extreme cases in which the principle is physically or mentally incapable to sign.

· Verify why the POA is being used

· If it’s use is not completely necessary, avoid use of it

If a POA is being used:

· Must be reviewed and approved by the Title Agency

· Must be reviewed and approved by the Lender (if used on the buyer side)

· Original Power of Attorney must be recorded at the County

When can a POA not be used?

· In all cases, a POA becomes null and void upon the death of the principle.

· A POA usually cannot be used when the property is titled in a Trust, LLC, or Corporation. This is solely dependent on how the Trust or Business Documents are written and would need to be reviewed by the Title Agency.

· Self-Dealing – when it directly benefits the Attorney in Fact (unless the POA allows it).

To avoid unnecessary headaches, ask your client questions upfront regarding the use of the POA. In addition, reach out to us for assistance in the preliminary stages of the selling or buying process to review a POA or answer any questions you or your client may have!

As always, please let us know should you have any questions regarding this topic!

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