Using a POA in Real Estate Transactions

Every month I get questions about the Power of Attorney and how they can be used, so I thought I would summarize some of the key points to look out for…

All Powers of Attorney used for the conveyance of Real Estate must be approved by the Escrow Agent and Title Insurer prior to recording. Not every Power of Attorney is acceptable and all POA’s in Arizona are subject to specific requirements that may invalidate POA’s executed elsewhere. If you or a client intends to use a Power of Attorney in a Real Estate transaction it should be approved in Escrow well before the scheduled closing. Generally, acceptable POA’s will meet the following requirements:

-The person granting the power must be alive.

-The POA must be signed by the Grantor AND a non-relative witness, AND both signatures must be notarized.

-The POA must specifically grant the power required for the transaction. Simply saying “Has the authority to transact my business” or “to sell my property” is not sufficient. “Has the authority to buy, sell, encumber, deed and convey my Real Property” conveys specific powers required. Language can vary, but intent must be indisputable.

--An original signed POA must be provided for recording.

-The person granted the authority (Attorney-in-Fact) cannot receive any compensation or proceeds from the transaction unless specifically stated in the POA.(Exceptions for Attorneys-in-Fact who hold title in the property, as to their interest).

-Any exceptions or restrictions will apply, such as the power being granted only in the event of incapacity of the grantor, or only for a specific purpose or time period.

-The Attorney in fact may not direct the payment of sale proceeds to other than the vested owner of the property.

The above are general requirements, and the Title Underwriter or Escrow Agent may reject a POA for any number of reasons. Therefore it is important to have all POA’s approved promptly. The Escrow Agent is able to prepare a Special Power of Attorney for use on a one time basis for your transaction only. This Special POA will meet all of the requirements needed to properly convey the property.

Tom Diller | VP- Director of Business Development | Equity Title Agency | 602-769-8226