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Definitions
Principal - A person who authorizes another to act for him as his agent.
Agent - A person who represents and acts by authority of and on account of a principal.
Power of Attorney - A written instrument by which a person appoints another to perform certain specific acts or kinds of acts on behalf of the principal.
Qualification of Parties - Any person competent to contract may become a principal and any person competent to contract may become an agent. See also Section 15.48.8.
Types of Powers of Attorney
Special
If the power conferred is specified, limited or restricted in any particular, it is a special power of attorney. It may be directed to the performance of a particular act, or acts, for example.
“To execute leases and collect rentals from the real property owned by me in Mustang County, Texas, said property described as follows:”
or
“To sell the 50-acre tract owned by me in Longhorn County, Texas, said property described as follows:”
General or Universal
A power of attorney purporting to confer a wide variety of specific acts upon an agent is referred to as a general power of attorney.
Joint Powers
Two or more persons may be named as attorneys-in-fact in a power of attorney. The appointment may confer powers by which one of the agents, or by which less than all the agents, may act rather than all agents acting in concert. In the absence of a clear expression in the power of attorney to the contrary, all joint agents should be required to join in any act to become binding upon the principal.
Durable - discussed later in Section 15.48.6
Requirements
For title insurance purposes, a power of attorney authorizing an agent to act for a principal in matters concerning real property must be in writing, acknowledged, and recorded in the office of the county recorder of the county in which the real property is situated.
A special power of attorney, whether durable or not, is preferred.
See also Texas Bulletin TX2013004 - Relating to Powers of Attorney in HEL transactions.
A power of attorney properly executed, acknowledged, recorded, and otherwise proper will not be relied upon by title insurers in instances where the agent: |
· | Delegates his authority if not expressly authorized to do so in the power of attorney. |
· | Deals with the principal’s property for his own benefit. |
· | Conveys principal’s property to himself. |
· | Releases a mortgage made by the agent in favor of principal. |
· | Mortgages principals’ property to himself. |
· | Executed a gift deed of principal’s property. |
· | Executes a mortgage or release of mortgage without valuable consideration. |
· | Conveys or encumbers the principal’s homestead property. |
· | Partitions the principal’s property. |
The execution of conveyances under authority of a power of attorney must be in the name of the principal. This means the agent must sign the name of the principal and sign his own name as attorney-in-fact. |
For example: |
Paul P. Principal duly appointed Arthur A. Agent his attorney-in-fact with authority to sell and convey his ranch. A deed executed pursuant to that authority would be proper in the following form: |
/s/ Paul P. Principal (written) |
Paul P. Principal (typed or printed) |
By:/s/ Arthur A. Agent (written) |
Arthur A. Agent (typed or printed) |
His Attorney-in-Fact (typed or printed) |
The acknowledgment of the above execution should be that of Arthur A. Agent, as attorney-in-fact for Paul P. Principal. |
The following are methods used to terminate powers of attorney: |
· | By private declaration to attorney-in-fact. |
· | By filing a revocation of power of attorney in the county clerk’s records in the county in which the property is situated; |
· | An express renunciation of the authority by the attorney-in-fact; |
· | Subsequent marriage of principal; |
· | Death of principal or agent; |
· | Incapacity of principal unless there is compliance with Estates Code, §751-752 (See Durable Power of Attorney); |
· | Insolvency of principal; |
· | War. |
Generally, for title insurance purposes, termination or revocation of a power of attorney in any form should be honored by a policy issuing agent with actual notice. A written termination or revocation filed of record should be a requirement. |
Definition A durable power of attorney is one under which an attorney-in-fact is authorized to continue acting for and in the name of the principal after the principal’s inability to contract. |
When Power of Attorney is not Terminated by Disability |
· | When a principal designates another his attorney-in-fact or agent by power of attorney in writing and the writing contains the words “this power of attorney is not affected by subsequent disability or incapacity of the principal” or similar words showing the intent of the principal that the authority of the attorney-in-fact should not terminate on the principal’s disability, then the powers of the attorney-in-fact or agent shall be exercisable by him on behalf of the principal notwithstanding later disability or incapacity of the principal. All acts done by the attorney-in-fact or agent pursuant to the power, during any period of disability or incapacity of the principal, shall have the same effect and shall inure to the benefit of and bind the principal as if the principals were not disabled or incapacitated. |
· | A durable power of attorney does not lapse because of the passage of time unless a time limitation is specifically stated in the instrument creating the power of attorney. |
· | A durable power of attorney must be in writing, signed by a principal who is an adult, acknowledged and filed for record in a county in which the principal resides. If a guardian shall thereafter be appointed for the principal, the powers of the attorney-in-fact, or agent, shall terminate upon the qualification of the guardian, and the attorney-in-fact or agent shall deliver to the guardian all assets of the estate of the ward in the agent’s or attorney-in-fact’s possession and shall account to the guardian as if the principal himself terminated the powers. |
· | A durable power of attorney may be revoked by the principal signing an instrument revoking the power of attorney and filing it for record in the county in which the power of attorney is recorded. |
Statutory Durable Power of Attorney (Estates Code §752) |
· | Subchapter B §752 includes a form of a durable power of attorney, as well as sections which describe the specific powers of an attorney-in-fact or agent included in the “statutory durable power of attorney”. §752 includes the form and also provides that the form is not exclusive - that other forms of power of attorney may be used. |
· | The durable power of attorney is effective as to purchasers who in good faith rely on the power of attorney and an affidavit executed by the attorney-in-fact to the effect that the power has not terminated by revocation, principal’s death or guardianship. (Estates Code §751.055). |
· | Estates Code §752.102 provides for the construction of the attorney-in-fact’s powers relating to real property transactions when a statutory durable power of attorney is used. If the principal fails to cross out “real property transactions” on the form, the attorney-in-fact is authorized to sell, convey and mortgage real estate as well as being empowered to perform other acts relative to real property. |
Instruments in a chain of title executed by an attorney-in-fact merit careful analysis and consideration. The power of attorney must be executed with all the dignity and formality required of the instrument the attorney-in-fact is empowered to execute. |
Who May Execute Or Act Under A Power Of Attorney
Any person natural or artificial who is competent to contract may act as agent under a power of attorney. Two or more persons, either jointly or severally, may be appointed as agents.
Where A and B are appointed as attorney-in-fact, it is generally held that, in the absence of contrary intention, the authority conferred is joint and both must act before they can bind the principal.
A corporation may give a power of attorney and become bound by the act of its agent, provided that the agent is appointed by the board of directors and there is no sale of all the assets. If authorized by its articles, a corporation may act as an attorney-in-fact. A partnership or partner may also give a power of attorney, if authorized by all the partners.
Generally, fiduciaries (trustees, conservators, guardians, executors, personal representatives, etc.) may not execute powers of attorney or otherwise delegate their authorities and responsibilities unless the document that establishes such authorities and responsibilities (trust agreements, court order appointing, will, etc.) provides for such delegation of authority. The Texas Trust Act was amended effective September 1, 2017 to allow Trustees to give powers of attorney (Tex. Prop. Code Sec. 113.018). It is our position that this amendment does not apply to a trust created in a will which was executed prior to the effective date of the amendment.
· | Care should be taken when dealing with older powers of attorney, e.g., those over two years old. Check the facts of each transaction. |
· | At the time of closing and insuring, an affidavit is necessary affirming that the principal is not deceased, or incapacitated (if not a durable power of attorney), and that the power of attorney has not been revoked, especially when it is an older power of attorney. The following forms properly executed and acknowledged will satisfy this requirement. |
Agent’s Certification: Texas Estates Code Section 751.203
Tx Affidavit Regarding Power of Attorney 1997
See also Texas Bulletin TX2015005 – LEGISLATIVE UPDATE 2015 Relating to Time limit for recording a durable power of attorney
See also Tx Affidavit Regarding Power of Attorney 1997
It should be verified in some manner that the principal or principals are alive as of the date/time of closing, apparently competent, and has not revoked the power of attorney. This is best accomplished by a direct conversation with the principal via telephone. The conversation should be documented, if possible, by requesting the principal to verify the conversation in writing. Alternatively, a confirmation may be prepared and sent by the policy issuing agent. |
The Military Power of Attorney is established by Federal Law and is available for use by any service member or federal employee being deployed into a location where legal assistance from non-military legal assistance is not reasonably available.
A military power may be used as a statutory durable power of attorney even though the form is not identical to the Texas Statutory Power. It may be acknowledged by judge advocates, civilian attorneys serving as legal assistance attorneys, all adjutants and others designated by the Secretary of Defense.