Major Revision to Maryland Power of Attorney Act Effective October 1, 2010 will have substantial Impact on Real Estate Transactions Using a Power of Attorney
The Maryland Legislature has made a major revision to its Power of Attorney statute which could have a significant impact upon real estate transactions wherein a Power of Attorney is being used. The new Maryland General and Limited Power of Attorney Act (Annotated Code of Maryland, Estate and Trusts Article, Sections 17-101 through 204), which applies to every power of attorney executed on or after October 1, 2010, will require that, in addition to being signed before a Notary Public, every Power of Attorney be “attested and signed by two or more adult witnesses who signed in the presence of the principal and in the presence of each other.” This will essentially require the same (or arguably greater) formality for a Power of Attorney as is presently required for execution of a Last Will and Testament. The Notary Public may serve as one of the required adult witnesses. Interestingly, the Real Property Article was not revised and still requires only that Powers of Attorney have the same formality as a Deed. In spite of this, we believe that compliance with the new law is required to have a valid Power of Attorney.
The bill does provide that a power of attorney executed in a foreign state or a military power of attorney will remain valid and enforceable in Maryland provided that, at the time it was executed, it complied with the law of the jurisdiction in which it was signed (for out of state Powers of Attorney) or federal law (for military Powers of Attorney).
The new statute also provides two optional statutory power of attorney forms, stating that “a person may not require an additional or different form of a power of attorney for any authority granted in a statutory form power of attorney” and providing penalties for a refusal to accept one of these forms. However, the statute does not preclude the use of other Power of Attorney forms provided that they are properly executed. These forms do contain specific provisions for real estate transactions, but are not as comprehensive as those prepared by real estate professionals. To read more about the Act and see the forms, you may visit:
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Lastly, the bill provides that a photocopy or electronically transmitted copy of an original power of attorney is as valid and binding as the original but permits a clerk of the court to refuse to record a copy. In light of this language, it is our opinion that it is highly questionable that clerks will accept copies.
Accordingly, Real estate practitioners should ensure that any Powers of Attorney executed after October 1, 2010 be properly witnessed and notarized. It is also highly recommended as a best practice that, in spite of the availability of the statutory forms, parties to a real estate transaction continue to obtain approved real estate specific Limited Power of Attorney forms from the title company to ensure compliance with all legal and lender requirements and title insurance underwriting guidelines in the transaction.
John G. Nalls, Esq. Counselors Title, LLC
4400 Jenifer Street, NW, Suite 2
Washington, DC 20015
202-683-1572 office direct
202-686-7223 fax
240-498-8290 cell
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