Often times, clients cannot be present for a real estate closing and ask if they can execute their closing documents in advance. Depending on the circumstances, there are situations where this cannot be done. In some instances, a Power of Attorney can be used. The following addresses the basic use of Powers of Attorney as they relate to real estate transactions.
A Power of Attorney is a legal document delegating authority from the maker of the Power of Attorney (the “Principal”) and grants the right to act on the principal’s behalf to another (the “Agent”). A “General Power of Attorney” typically gives the Agent very broad powers to perform any legal act on behalf of the Principal. However, under Florida Law the Power of Attorney must be specific to the authority granted to the Agent, which is especially true in real estate transactions.
Accordingly, an underwriter will often require that the Power of Attorney be specific as to the real property that is subject of the transaction and the documents to be signed on behalf of the Principal. This type of Power of Attorney is commonly referred to as a “Limited Power of Attorney.”
Again, this is meant to be only a brief overview of the basic use of Powers of Attorney as they relate to real estate transactions. Any individual interested in creating a Power of Attorney should consult with their attorney in order to determine the appropriate scope of the authority and to ensure that it is prepared with all of the required formalities.
Did You Know:
• An agent may not, without his principal’s knowledge and consent, engage in any transaction to bring his personal interest into conflict with his obligation to his principal. (It is important to note that this provision has been interpreted by many attorney’s to preclude a real estate agent from acting as an Agent under a Power of Attorney in any transaction in which the agent earns a real estate commission.)
• All powers of attorney executed on or after October 1, 2011, must be signed by the principal, two subscribing witnesses and acknowledged by the principal before a notary public.
• A power of attorney to convey or mortgage real property executed in another state which does not comply with the execution requirements set forth by Florida Law, will be valid in Florida if, when it was executed, the power of attorney and its execution complied with the laws of the state it was executed.
This communication is not intended to establish an attorney client relationship, and to the extent anything contained herein could be construed as legal advice or guidance, you are strongly encouraged to consult with your own attorney before relying upon any information contained herein.
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