Release Date: 07/25/2017
QUESTION: I have been asked to list a property that is owned by an elderly couple. I'll call them Charles and Ann Jones. Charles is suffering from dementia. However, he signed a Durable Power of Attorney several years ago that authorizes Ann to enter into real estate transactions on his behalf. I want to make sure Ann signs my listing agreement properly as well as any subsequent documents such as an Offer to Purchase and Contract. How should Ann sign these documents on behalf of her husband?
ANSWER: In North Carolina, a power of attorney is defined as a written instrument granting power in an agent, usually referred to as an "attorney-in-fact", to transact business for his or her principal. A written power of attorney is considered an agency contract that creates a principal-agent relationship.
Powers of attorney are "strictly construed" which means that they grant only the powers enumerated in the writing. Brokers should review any power of attorney given to them to be sure it authorizes the named attorney-in-fact to engage in real estate transactions on behalf of the named principal.
North Carolina's statutes authorize powers of attorney to be signed one of two ways (see NCGS §§ 47-43.1, 47-115). Our recommendation is that the attorney-in-fact sign all real estate-related agreements by signing the principal's name, adding the word "by", signing the attorney-in-fact's name and, finally, adding "under POA". In your fact situation, the listing agreement and all subsequent agreements should be signed Charles Jones by Ann Jones, under POA. Signing in this fashion makes it clear that Charles is a party to the agreements.
An alternative, also considered acceptable, is for the attorney-in-fact to sign his or her name as attorney-in-fact for the principal. In other words, it is perfectly legal for your listing agreement to be signed: "Ann Jones, attorney-in-fact for Charles Jones".
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