Durable Power of Attorney: Authority and Limitations in Real Estate Transactions

Title:
Durable Power of Attorney: Authority and Limitations in Real Estate Transactions

Overview:
When working with a customer who is using a Durable Power of Attorney (POA), it is critical to verify the scope of authority granted—especially as it relates to real estate transactions. Misunderstanding or overlooking these details can result in invalid contracts, delays, or legal exposure for all parties involved.

Key Guidance:

• Always obtain and review a complete copy of the Durable Power of Attorney before proceeding with any transaction.

• Confirm that the POA specifically authorizes real estate transactions. Do not assume general authority includes the ability to buy, sell, or convey property.

• Verify that the POA is properly executed in accordance with Florida law (signed, witnessed by two witnesses, and notarized).

• Ensure the individual signing documents clearly identifies their capacity (e.g., “John Smith, as Attorney-in-Fact for Mary Smith”).

• When in doubt, consult with the closing agent or a real estate attorney to confirm the validity and scope of the POA.

• Understand that a POA is only valid while the grantor (principal) is alive.

Compliance Notes:

• Under Florida law, a Power of Attorney must comply with Chapter 709, Florida Statutes, including proper execution requirements and specific authority for real estate-related acts.

• A POA terminates immediately upon the death of the principal. At that point, only a court-appointed personal representative or trustee (if applicable) has authority to act on behalf of the estate.

• Allowing a transaction to proceed under an invalid or expired POA may expose the brokerage to legal and disciplinary risk under Chapter 475, F.S. and FREC rules.

• The NAR Code of Ethics (Article 1) requires Realtors to protect the interests of their clients, which includes verifying legal authority of parties signing documents.

Bottom Line:
Do not treat a Power of Attorney as routine paperwork. Verify its authority, ensure it complies with Florida law, and confirm it is still valid at the time of the transaction. Once the principal passes, the POA has no authority—period. Careful review upfront protects your client, your transaction, and your license.