BY GARY ROSNER & PAULA LEVY,
RITTER CHUSID, LLP
In the title industry, a power of attorney (“POA”) is used when one of the parties to the transaction cannot be physically present at the closing. Transactions involving a power of attorney are ripe for fraud and errors.
The following checklist can be used to determine whether or not to proceed with insuring a real property transaction involving a POA:
Powers of Attorney (POAs) are legal documents that allow an individual, the “Grantor,” to nominate an agent, their “Attorney In Fact,” to sign and execute anything that the Grantor chooses, on their behalf, as though they were doing it themselves.
This can include contracts, loans, deeds, stock purchase, applications for government services, sale of real property, medical forms and virtually anything else that can be contemplated.
In real estate transactions, a Power of Attorney or POA is commonly seen when a party to the transaction such as the buyer or seller is either unavailable because they cannot attend the closing, or they are too ill or unable to physically sign the closing documents.
Many states have laws which essentially require a POA to be accepted at face value, so long as there is no reason to suspect fraud or unlawful inducement in the use of the POA.
Unfortunately, because a POA can provide an Attorney in Fact with near-limitless powers to act on behalf of another person, fraud is a very real risk that must be taken seriously.