This form is used by an agent or escrow officer when an owner or buyer appoints a person who is to act on their behalf as their attorney-in-fact, to grant specific powers to the person authorized to act as their attorney-in-fact.
Authority to bind a transaction participant
Power of attorney is a temporary authority granted to an individual to perform activities during a period of the owner’s:
- incapacity; or
- travel.
For example, a property owner with a disability wants to sell their primary residence and buy replacement property, but they are unable to fully comprehend the sales terms.
Or a buyer plans to be out of the country during the time their real estate transaction will take place but needs to be able to physically sign transaction documents.
In those instances, it’s appropriate for the transaction participant to authorize another to sign on their behalf, referred to as the authorized individual or attorney-in-fact.
Different forms are used at different stages of the real estate transaction when dealing with a power of attorney situation.
A uniform statutory form entitled Power of Attorney grants powers to the authorized individual agreed to represent the transaction participant. [See RPI Form 447]
To be effective, the Power of Attorney form needs to be notarized by a licensed notary public. [See RPI Form 447]
Further, when entering into an agreement, the identity of the transaction participant and the identity of their appointed attorney-in-fact is verified through a Verification of Capacity to Represent Addendum. [See RPI Form 252]
Types of agreements calling for this addendum include:
- listing agreements;
- counteroffers;
- purchase agreements; and
- property management agreements.
Granting power of attorney
An agent or escrow officer uses the Power of Attorney — Uniform Statutory Form published by Realty Publications, Inc. (RPI) when an owner or buyer appoints a person who is to act on their behalf as their attorney-in-fact. The form grants specific powers to the person authorized to act as their attorney-in-fact. [See RPI Form 447]
Through the statutory form, the transaction participant may choose specific powers to grant to the attorney-in-fact for particular transactions and situations or choose to grant all powers on a broad scale to the attorney-in-fact. [See RPI Form 447]
The transaction participant accomplishes this by initialing next to each option for which they want to grant specific powers. When they do not wish to grant powers to the option listed, they leave the item blank without including their initial. [See RPI Form 447]
When the transaction participant wants to grant all powers, they initial next to option (n): All of the powers listed above. No other line needs to be initialed. [See RPI Form 447]
Powers may be limited or extended by filling out the lines provided in the Special Instructions. Here, one option is to indicate when the power of attorney is to be revoked.
Unless directed otherwise, power of attorney will be effective immediately and will continue until it is revoked.
The transaction participant may choose to allow the power of attorney to remain effective even when the participant becomes incapacitated, or they may strike through the sentence to remove this power. [See RPI Form 447]
When the transaction participant designates more than one authorized individual power of attorney, they check a box indicating whether the authorized individuals are to act:
- separately; or
- jointly.
Authorized individuals acting jointly need to act or sign together. On the contrary, when they are authorized to act separately, either authorized individual may act alone without the signature of the other. [See RPI Form 447]
The transaction participant then signs the form and notarizes it in the county in which they live.
On acceptance by the attorney-in-fact, the attorney-in-fact assumes the fiduciary and other legal responsibilities of an agent authorized to act on another’s behalf. [See RPI Form 447]
Form navigation page published 04-2022.
Form last revised 2016.
Form-of-the-Week: Power of Attorney and Verification of Capacity to Represent Addendum — Forms 447 and 252
Form-of-the-Week: The Verification of Capacity to Represent Addendum — confirmation of an individual’s authority to sign
Letter to the Editor: How do I report the death of a licensee to the DRE?
Recent Case Decision: Does power of attorney trump HOA bylaws excluding non-owners from participating in meetings?
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