Tuesday, September 21, 2010

New Maryland Power of Attorney Changes Effective October 1st, 2010

On May 20, 2010, Governor O’Malley signed into law Chapter 689, HB 659 which repeals Estates and Trusts Sections 13–601 through 13–603 (Powers of Attorney) and adds Estates and Trusts Sections 17–101 through 17–204 under the new title “Maryland General and Limited Power of Attorney Act.” The Act takes effect on October 1, 2010.

Among the many changes are two distinct provisions which Maryland real estate practitioners should be aware of: (1) New execution requirements and (2) new statutory forms.

New Execution Requirements

In addition to the pre-existing requirements for properly executing a power of attorney (POA), a POA executed after September 30th must be attested and signed by two or more adult witnesses who sign in the presence of the principal and in the presence of each other (one of the witnesses can be the notary). Signature blocks for these new requirements are a part of the new statutory form.

New Statutory Forms

The Act creates, among others, two forms which real estate professionals should be aware of. The first is the Maryland Statutory Form Limited Power of Attorney. While the statutory doesn't have to be used, if it is it cannot be refused on the basis of the content of the form alone.

A Maryland real estate professional will also see a Certification as to the Validity of Power of Attorney and Agent’s Authority used in conjunction with a POA. This form must be executed before a notary and recorded along with the POA in every transaction. In the absence of fraud, such certification is “conclusive proof of the nonrevocation . . . of the power at that time.”

As a reminder, a POA should only be used when principal(s) absolutely cannot sign or be present at a closing. They have been tools for fraud and real estate related scams. As a title company, we will always inquire as to why one is being used, so if your buyer or seller is using one, please be prepared for questions!