Authority to list property under a power of attorney
QUESTION: A homeowner signed a power of attorney allowing his adult son to act on his behalf in financial matters, including the sale of real property. The POA specifies a variety of things that the son may do on the homeowner’s behalf. The homeowner now has dementia, but was competent when the POA was prepared and signed. Is the son free to sign listing agreements on the father’s behalf or is further documentation required?
ANSWER: The son likely can sign a listing agreement on his father’s behalf without further documentation. Under previously-existing law, in order to survive the principal’s incapacity, the power of attorney had to contain words showing the intent of the principal that the authority conferred could be exercised notwithstanding the principal’s subsequent incapacity. A POA containing such a provision was referred to as a “durable” POA. However, that changed with the enactment of the NC Uniform Power of Attorney Act (the “Act”), which went into effect January 1, 2018. Under the Act, a POA survives the principal’s incapacity unless the POA expressly provides that it is terminated by the incapacity of the principal. The Act includes statutory forms that may be used to create a power of attorney. One of them is designed to give the agent broad authority to act on the principal’s behalf, while the other one is specific to real estate transactions. Either form could be used to authorize an agent to handle all aspects of a real estate transaction on the principal’s behalf. See Sections 32A-3-301 and 32A-3-303 of the Act for both forms.
The Act recognizes the continuing validity of POAs signed before the Act went into effect, so if the POA in question was signed before January 1, 2018, that should not present any problem. However, if there is any question about the son’s authority to list and sell property on his father’s behalf under the POA, an attorney should be consulted.
Assuming the son has the authority under the POA to enter into a listing agreement, you would still show the father as the “Seller” on the listing agreement, and the son’s status as agent would be specified on the signature line. We recommend that this be accomplished by the son signing his father’s name, followed by: “by [son’s name], agent.” Alternatively, the son could sign his own name, followed by “agent for [father’s name].”
Also be aware that if it has not been recorded already, any closing attorney will require that the POA be recorded along with the deed signed by the seller’s son as his agent.
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