Five important DOs and DON'Ts you should know with the new legislation "North Carolina’s Uniform Power of Attorney Act" which became effective January 2018.

The use of a Power of Attorney (POA) for a real estate closing has long been a tool used when, for one reason or another, a party to the transaction cannot attend the real estate closing. In 2018, a new law that took effect repealed and amended many aspects of previous statutes relating to Power of Attorneys in North Carolina. A few of the points to consider when you learn you will be unavailable for closing and would like to use a POA for your closing include: 


1. Notify the Closing Attorney

DON’T panic. Contact the closing attorney immediately as they can work on your behalf to draft an appropriate Power of Attorney appointment for the transaction. This document will appoint an “agent” (the attorney-in-fact named in the Power of Attorney document). The agent will be authorized to act on behalf of the “principal” (the individual who grants authority to the attorney-in-fact) and will have the authority to sign the closing documents. The document will help ensure the closing goes on as scheduled — even in your absence. 


2. Time is of the essence

DON’T delay, especially if a lender is involved in your transaction. Often the closing attorney will need to contact the lender to obtain lender approval to use the Power of Attorney for the transaction. In addition to lender approval, many title insurers also request the Power of Attorney be sent to them for pre-approval. 


3. Contact the closing attorney

DO be aware of some highlights relating to the law governing Power of Attorney appointments. These highlights include:

  1. A Power of Attorney, known as POA (the document signed by the principal appointing the attorney-in-fact) does need to be registered in the office of the register of deeds. 
  2. POAs drafted after 01/01/2018 are durable unless it expressly provides that it is terminated by the incapacity of the principal.
  3. Proper execution of the POA is required. 
  4. POAs signed outside of North Carolina are valid in North Carolina if, at execution of the POA, the document complied with the laws of the jurisdiction in which it was signed or federal requirements for military POAs. 
  5. Termination occurs and/or the agent’s authority to act under the POA ceases if among other reasons, the principal dies; at incapacity of the principal if the POA is not durable; when revoked by the principal; when it terminates according to the document’s terms; its purpose is accomplished; the principal revokes the agent’s authority or the agent dies/resigns/becomes incompetent with no mechanism for future agent appointment provided/the agent is removed or the POA terminates.
  6. At closings with Hutchens Law Firm, the Agent you appoint will be asked to sign a certification that in essence states they were duly appointed under a properly executed POA and that the appointment is still exercisable.


4. Non-attorneys Cannot Advise You on the Law

DON'T accept blank forms or accept legal advice by a non-lawyer regarding how to fill the form out. This is probably one of the most important tips here. If you need a POA or any other type of legal document, contact a licensed attorney. In 2017, the North Carolina State Bar ruled that a company that handed out a blank POA form engaged in the unauthorized practice of law. The NC State Bar suggested that merely recommending a person get a POA is different than actually providing one to the party and then explaining the contents.


5. One Size May Not Fit All

DON'T use simple boilerplate forms - they may be detrimental to your legal needs. Seeking the assistance of qualified legal help is often a well-served investment, and it may not be as costly as you think. 

Published by Wendy Hughes on February 20, 2019.