When most people hear the term “power of attorney” they often think of situations surrounding healthcare and financial decision-making. It is less commonly known that individuals can often grant power of attorney during real estate transactions, specifically for closings.
What is Power of Attorney?
Simply stated, a power of attorney (POA) is a legal document in which one individual, known as the principal, grants another person, known as the agent, the right to handle his or hers personal and/or financial affairs. In most cases, it transfers certain powers to the agent if the individual becomes incapacitated or unable to make decisions on their own. However, in the case of real estate closings, a person might use POA because they are unable to attend a closing.
POA for Real Estate Closings
Although most individuals are present for their real estate closings, there are instances when some are unable to attend based on scheduling or other conflicts. Before using POA for real estate closings, there are some important things to know:
- POA forms need to meet Florida’s statutory requirements. First, it’s important to use a legitimate POA form. Some that are found through internet searches, at office supply stores, or in other states are not permissible. Under Florida law, the POA must include signatures of two witnesses and a notary. It’s important to know that some lenders will not permit use of a POA. If they do, the POA must be specific to the transaction and require that the property, lender name, and loan number be identified.
- Selecting a POA. It probably seems like common sense that the person you select as your POA should be someone you know and trust. As a further safeguard, it is illegal for a person with a financial interest in a transaction to act as a POA in Florida. For example, it is currently illegal for a real estate agent who will receive a commission at closing to be named POA.
Although it is not mandatory to have a lawyer handle your POA, it can be beneficial. The legal terms and protocols involved can be tricky for someone who does not have any experience with this legal document. A lawyer will ensure your POA is in accordance with your state’s laws and will make sure everything is in working order for your closing.
The Law Office of Donna Hearne-Gousse will help you through the process of properly executing a POA for a real estate transaction, and can assist with all aspects of title and escrow. We welcome you to contact us to discuss title services, closing services, or any other real estate related matter.
The Law Office of Donna Hearne-Gousse