The Common Misconception
There will come a time where a person holding a Power of Attorney for another will sign a lease or otherwise act on behalf of someone else. It could be someone acting on behalf of a property owner where you manage the home. Now, the tenant or property owner dies and you think you can continue to deal with the person who has the Power of Attorney.
YOU CAN'T continue dealing with someone who had Power of Attorney after the principal dies. A Power of Attorney DIES the moment a person who gave someone a Power of Attorney dies. No exceptions, no excuses, no sob stories. The POA is DEAD and has no more legal relevance.
What Does "Power of Attorney" Mean?
A POA is a legal instrument authorized by law under which one person or entity grants authority to an entity or one or more individuals to make decisions and take actions on the grantor's behalf. The authority that is granted will be contained in the body of the POA.
The authority can encompass a wide variety of transactions, known as a General POA, or can be limited to just one use or purpose, known as a Limited POA.
Key Terms to Know
- Principal: The person granting the authority
- Attorney in Fact: The individual receiving the authority (this does NOT mean they are a licensed attorney)
- Third Party: The party with whom the attorney in fact conducts a transaction (this is YOU, the property manager)
- Durable POA: A POA that can survive the subsequent incapacity of the principal
Florida Statute 709.08 - Durable Power of Attorney
Florida Statute 709.08 sets forth the law regarding Durable POA documents in Florida drafted after October 1, 1995. This statute authorizes the attorney in fact to handle real estate transactions—in fact, it authorizes the attorney in fact to sell the house of the principal!
Section 709.08 (1) states that a durable power of attorney is a written power by which a principal designates another as the principal's attorney in fact. With the correct wording, the Durable POA can survive the subsequent incapacity on the part of the principal.
Scenario: Multiple Attorneys in Fact
Tim, the property manager, made an appointment to meet with three prospective residents. One of them, Dwayne, doesn't show up. Instead, Pablo arrives saying Dwayne gave him and his brother Tommy a Durable POA to handle real estate transactions.
Important: Section 709.08 (9) (a) requires that both attorneys in fact concur with respect to any exercise of the Durable POA unless the document provides otherwise. Therefore, Tommy would need to sign the lease along with Pablo in order to bind Dwayne to the contractual terms.
Verifying a Power of Attorney
If you're skeptical about whether someone truly has POA authority, the statute authorizes you to request that the attorney in fact sign a notarized affidavit attesting to:
- That they are indeed the attorney in fact named in the Durable POA executed by the principal
- The location of where the principal is domiciled
- That the Durable POA is currently exercisable by the attorney in fact
- To the best of the attorney in fact's knowledge, that the principal is not deceased
- That there has been no revocation of the POA by the principal or any outside judicial authority
Section 709.08 (11) states that the unreasonable refusal of a third party to allow an attorney in fact to act pursuant to the power could subject the third party to liability for attorney's fees and costs if sued and you lose in court. Call your attorney if there is any doubt before refusing!
Common Mistake #1: Improperly Signed Lease
Marta, the property manager, believes she is leasing an apartment to Chester Turnkey. Chester did not sign the lease—Robert Jones, who has POA, executed the lease on Chester's behalf. Robert showed the POA to Marta, and she believed it was valid.
The mistake: Robert "signed" the lease by simply writing Chester's name. This is WRONG!
The Correct Way to Sign with POA
The attorney in fact must sign the lease properly as follows:
By: ________________
Robert Jones, Attorney-in-fact
Common Mistake #2: Third Party Access
It is very common for a property manager to receive paperwork from a resident who is out of town. The resident grants POA to a friend to help manage personal affairs. Why do you need to be careful?
Massive liability can follow if you allow the attorney in fact into the resident's unit without proper documentation. Read the POA carefully—if the specific power governing disposition of personal property is not checked off, and you let the attorney in fact into the unit, you can be sure that the resident will sue you if anything real or imaginary is missing!
