Granting a party Power of Attorney often comes with specifically-listed powers and rights; in the case of Power of Attorney for Real Estate Transactions, these powers and rights are limited to the ability to make real estate transactions including purchases and sales – though purchases and sales are frequently separated into unique documents to further limit the powers granted.
In a Power of Attorney for Real Estate Transactions document, there are two parties involved: the “Principal” or “Grantor” who is assigning over these specific powers, and the “Attorney-in-Fact” or “Agent” who is therefore receiving these same powers and then allowed to act on the legal behalf of the Grantor. Though many Power of Attorney forms allow for a number of decisions to be made after this point, Power of Attorney for Real Estate Transactions documents often specifically limit these decisions to specific transactions.
At first glance, one might assume that Power of Attorney for Real Estate Transactions gives the Attorney-in-Fact the ability to make a number of real estate decisions on the Grantor’s behalf. But typically these rights are vastly restricted, frequently down to a single type or instance of transaction. For this reason, these powers are often further limited down to the ability to make purchases or sales.
The answer to the previous question is also demonstrated by the fact that there are two types of Powers of Attorney for Real Estate Transaction documents: Purchases and Sales.
Typically, a Real Estate Purchase document will grant the Attorney-in-Fact even more limited rights than the Real Estate Sales document. But the Real Estate Sales document will also have limits on its effectiveness (see question: When is a Power of Attorney for Real Estate Transactions Effective?)
While both Power of Attorney for Real Estate Transactions and General Power of Attorney will contain provisions that specifically list the powers that are granted by the document, the scope of these provisions is vastly different in each case. General Power of Attorney will allow the Agent a number of legal and financial decisions covering a wide range of potentialities; Power of Attorney for Real Estate Transactions typically only require that specific transactions be included in the provisions.
The first and most obvious difference is the specific types of powers granted in a Power of Attorney for Real Estate Transactions and other types of specific Powers of Attorney. Though they share the common thread of allowing the Attorney-in-Fact signatory powers, the purpose to which these signatory powers are granted (and therefore limited) are different.
Additionally, Power of Attorney for Real Estate Transactions tend to focus on the approval of singular or specific multiple transactions, whereas other specific Powers of Attorney, though limited, allow other decisions to be made on the Grantor’s behalf.
In the case of Powers of Attorney for Care of Children, for example, a number of decision-making powers are given to the Agent: making health care and education decisions are often included. In Power of Attorney for Real Estate Transactions, multiple decisions that are not specifically listed will not be included in the document.
Provided that the contract’s validity (see question below) is established and the Power of Attorney has not been revoked, the Power of Attorney for Real Estate Transactions will generally be enforceable contingent on whether or not the Attorney-in-Fact is acting in accordance with the powers authorized by the document.
Like all other contracts, Power of Attorney for Real Estate Sales or Purchases should meet all the legal requirements of an enforceable contract. Ensuring that both parties are mentally competent adults who are signing the agreement with full capacity of will is important, as is having the contract notarized.
Additionally, because Powers of Attorney for Real Estate Transactions are often signed because of issues across state lines, it’s important that these contracts legally conform to the laws of the state in which it’s being signed.
Because the powers granted in one of these documents are highly limited, the effectiveness of the document itself is also limited.
In the case of Power of Attorney for Real Estate Sale, for example, the contract ceases being effective once the terms of the transaction have been met (i.e. the sale has been made), if the Grantor has passed away or been rendered incapacitated somehow, or the Grantor revokes the Power of Attorney rights.
In the case of Power of Attorney for Real Estate Purchases, similar restrictions will be placed on the effectiveness of the contract, often with even further restrictions such as specifically naming the property and price for the purchase to be made.
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