Use of Power of Attorneys
A Power of Attorney is a legal document that conveys legal authority upon a party to act on behalf of another party (the party granting the authority is the “principal” and the party receiving the authority is the “agent”). When a POA is used as part of a real estate transaction, it is frequently given only in connection with a particular transaction, usually naming the property address and folio number specifically. When a POA is used, it is recorded in the public records along with the Deed as part of the closing.
The use of and protocols for POAs vary across different countries. We strongly recommend that sellers who may need to use a POA speak to an attorney and/or the closing agent as early in the sale process as possible to understand the requirements on the use of POA in Florida, even in circumstances where a seller has the desire to sell a property and does not currently have a Purchase and Sale offer. The earlier the seller speaks to an attorney, the better, and the higher the chances that unnecessary delays are avoided.
In Florida, the execution of Powers of Attorney (POA) must be done under the same strict protocols as Warranty Deeds. Moreover, it is up to the Closing Agent to accept or reject the use of POAs in conveyance documents. Therefore, if a POA will be used, it is usually a best practice that a) the Warranty Deed and Closing Affidavit are executed in original, with the requirements stated above, and b) that if a POA is necessary for the execution of other closing documents, that the POA complies with the necessary requirements for execution. If a POA is to be used, it is imperative that the seller receive written authorization for use of the POA from the closing agent and the buyers’ lender, if applicable. Moreover, in transactions where a seller knows they will not be present for closing before a Purchase and Sale contract is executed, the seller may consider including language in the contract that reflects the use of a POA and/or other acknowledgments of execution of documents by the seller at a different place than that of the closing.
In instances where the Purchase and Sale Contract are executed and the seller discloses during the transaction that they will not be able to attend the closing and an attorney in fact will be signing on their behalf, it is common that the Closing Agent to require additional affidavits (in the case of individual sellers) or Resolutions Authorizing the Sale (in the case of legal entities) that require notarization. This requirement oftentimes is difficult to comply with for sellers and can cause great inconvenience and delay. Sellers and seller’s real estate agents usually have the power to avoid delays and inconveniences if they can disclose these seller needs as early as possible in the transaction. Moreover, some listing agents publish these as requirements in the MLS listing, making it transparent to the buyer (and buyers realtor).
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