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Power Of Attorney Requirements

If a Buyer or Seller is unable to attend settlement, a Power of Attorney (POA) is often used in order to avoid a delay. A POA is written authorization to represent or act on another’s behalf in certain circumstances, usually specified in the document. It can be for private matters, business, or some other legal matter. The person authorizing the other to act is typically referred to as the principal and the one authorized to act is the agent or the attorney-in-fact.

Use of a POA should never be taken lightly and should only be used if there is no other reasonable alternative. It is also strongly recommended that a real estate agent NEVER act in the capacity to sign for a client through the use of a POA (check with your Broker for recommended practices). In any real estate transaction where you think a POA might be used, ALWAYS consult with the title company or lawyer handling the settlement for their recommendation on using or drafting the document. For a purchaser, the mortgage lender must give their approval on both the use of the POA and the content of the document.

Very often, when a seller is unavailable for settlement, the title company can make arrangements to have their documents signed separately or through the use of remote documents. This is usually a preferred alternative to the use of a POA. Also, remember that someone acting in a fiduciary capacity such as a personal representative or a trustee CANNOT give their authority by use of a POA.

Maryland passed legislation which took effect on October 1, 2010 regarding the use of a POA. This new law governs both General and Limited POA’s and makes it more difficult to use such a document in real estate transactions, especially as a last-minute alternative to someone attending the closing. The new MD statutory form for a Limited POA is now seven pages long and must be signed by two witnesses in each other’s presence and notarized (the notary may be one of the witnesses). A shorter version may be used but must comply with the new statutory language and the signing requirements.

For questions or for preparation of a POA for a real estate transaction, please see the “Contact Us” section in the main menu of our website or call us at 410-825-2255.

DISCLAIMER: This information is intended for educational purposes only and does not constitute legal advice. You should not rely or act upon any information contained in this article without seeking the advice of qualified legal counsel.