Originally Published: 6/1/2012
In October, 2011, several changes were made to Florida Statutes dealing with the Powers of Attorney. Some of the more material provisions and/or changes thereto are as follows:
- Generally speaking, a power of attorney executed in Florida that is to be used to convey real property must have two witnesses and a notary.
- However, a power of attorney executed in another state after October 1, 2011 is now valid in Florida if it was properly executed in that state.
- Most believe that the new statutes make it clearer that real estate professionals and closing agents involved in a particular transaction should NOT agree to act as the agent under a power of attorney due to the potential conflict of interest.
- An agent must act in good faith, may only act within the specific scope of the Power of Attorney, may not delegate to third parties, and must keep detailed records or receipts, disbursements and transactions.
- A third person who in good faith accepts a properly executed Power of Attorney (such as a closing agent or real estate professional) may rely upon the Power of Attorney and the actions of the agent that are within the scope of authority granted in the power of attorney.
- Any third party who relies upon the power of attorney as set forth above in accordance with instructions from the agent shall be held harmless by the principal for any loss suffered as a result thereof.
- A third person who rejects a power of attorney must state their basis for doing so in writing within a reasonable period of time.
- An agent may not act outside of the authority specifically granted to them, and may never perform personal services or execute affidavits (such as closing affidavits) as to the principal’s personal knowledge.
The general consensus is that the new statutes create more clarity with regard to the use of powers of attorney, and in doing so, effectively created more liability when acting as a power of attorney. As such, if you are asked to act as an agent under a power of attorney, we strongly suggest that you seek the advice of counsel, and that you never do so if you are in any way involved in the subject transaction.