Title Tips - May 2015
TITLE TIPS BY JOE VITULLO - MAY 2015
Title: “Power of Attorney”
POWER OF ATTORNEY - A power of attorney is a written document authorizing another person to act on one's behalf regarding a specific action or actions. The principal, known as the donor, authorizes the agent, known as the donee, to act in the principal's absence. During its entire duration, the person granting the power of attorney must have the capacity to act personally, if present. The donor cannot be mentally incompetent, a minor, be deceased or have revoked the power of attorney. A power of attorney to sell or mortgage real estate must adequately describe the real estate to be sold or mortgaged. Rhode Island Title Standard 8.6 states, however, that a title examiner may rely upon a power of attorney which grants the power to convey "all my real estate" (or words of similar meaning), without reference to a particularly described parcel. The task specified in the power of attorney must also be executed by the person or entity to whom it was given and not a substitute.
A title examiner who finds a power of attorney involved in a chain of title relies upon it at his or her peril. The power of attorney must be executed with the same formalities necessary for the execution of the document to be executed by the agent. It is subject to the same rules of law. A power of attorney to sell or mortgage real estate must be executed, acknowledged, delivered and recorded like a deed or a mortgage. R.I.G.L. 34-11-34 states: "Any conveyance executed by the attorney shall be valid as if executed by the grantor himself, providing that a power of attorney be given by such grantor for this purpose; which power and the deed executed by the attorney thereunder shall be signed, acknowledged, delivered and recorded with like formalities prescribed by law concerning deeds from grantors in person." Consequently, a power of attorney, like a deed or mortgage or assignment, must be delivered by the donor to the donee. R.I.G.L. 34-22-6 states: "The donee of a power of attorney may, under and within the authority of the power, if he or she thinks fit, execute or do any assurance, instrument or thing in and with his or her own name and signature, and where sealing is required, with his or her own seal, and every assurance, instrument and thing so executed and done shall be as effectual in law, to all intents, as if it had been executed and done by the don(or) of the power in the name and with the signature, or signature and seal, of the donor thereof." R.I.G.L. 18-16-1 also provides for a handy, ready-made statutory power of attorney.
The donor is not prevented from giving a second power of attorney to another individual or entity to act in the same matter. Without specific authority, a donee of a power of attorney cannot delegate to a subagent a task involving personal judgment, discretion or personal skill, unless specifically authorized to do so in the instrument. In addition, Title Standard 3.7 specifies that a power of attorney may not be used to convey property to the attorney in fact unless the conveyance is specifically authorized in the donor's power.
There is a basic common law rule that if the principal can no longer act, the attorney-in-fact cannot act on the principal's behalf. If the principal should become mentally incapacitated, the power of attorney would ordinarily be invalidated, meaning that the donee could no longer act. Fortunately, this has been modified by statute. R.I.G.L. 34-22-6.1 provides for a special "durable" power of attorney. Whenever a donor designates another as his or her attorney in fact in writing and the writing contains the words "This power of attorney shall not be affected by the incompetency of the donor," or similar words, the power of the attorney in fact is exercisable notwithstanding the incompetency of the principal. A so-called "durable" power of attorney is nevertheless subject to revocation by the donor at any time.
R.I.G.L. 33-15-13 recognizes the ability of a guardian of a donor to revoke a power of attorney. In fact, if a Petition for Guardianship alleges that the donor lacks decision making ability regarding real property and the Petition is recorded in the Land Evidence Records, the subsequent appointment of the guardian will cause all conveyances of the donor, presumably including those of the attorney in fact, to be void. It appears, however, that this statute does not apply to "durable" powers of attorney. The durable power of attorney statute, R.I.G.L. 34-22-6.1 states that, where a durable power of attorney is used, any acts done by the attorney in fact or agent during any period of incompetency, or even uncertainty as to whether the donor is dead, shall be valid. A Petition for Guardianship, or even the possibility of death of the donor, does not revoke a durable power of attorney. If a guardian is subsequently appointed, the attorney in fact becomes accountable to the guardian and the guardian has the power to revoke or terminate all or any part of the power of attorney.