The purpose of this bulletin is to familiarize you with relevant portions of the new Florida Power of Attorney Act, Sections 709.2101-709.2402 effective as of October 1, 2011. The statute applies to both durable and non-durable powers of attorney created by a person (principal) to be used in Florida. It does not apply to a POA created by a legal entity such as a corporation, partnership or LLC. The new Act will significantly change how we handle real estate transactions involving the use of a power of attorney.
POA DOCUMENT EXECUTED IN FLORIDA §709.2106(2)
- Execution requirements: A POA executed on or after October 1, 2011, must be signed by the principal and by two (2) subscribing witnesses and be acknowledged before a notary public or as otherwise provided by the law regarding acknowledgement.
- Exceptions remain for military POA pursuant to 10 U.S.C. sec.1004(b).
POA EXECUTED OUT OF STATE §709.2106(3)
A POA executed in another state which does not comply with Florida law, may still be valid provided the POA and its execution complies with the law of the state of execution. As an example if that state’s law does not require witnesses, then the POA would not need to have witnesses. However, a POA used to convey or mortgage homestead property must still contain two (2) witnesses and a notary acknowledgment. F.S. 689.111
If the out of state POA does not comply with Florida’s execution requirements, you may require and rely upon an opinion of counsel licensed in the state of execution as to any matter of law concerning the POA.
VALIDITY OF A POA COPY vs. ORIGINAL §709.2106 (5)
- Photocopy – Unless otherwise stated in the POA, a photocopy or electronically transmitted copy of the power of attorney now has the same legal effect as the original. Notwithstanding this provision, Stewart Title Guaranty Company will require that an original POA or a certified copy be recorded.
- The recording Statute, specifically, Sections 695.01 and 695.19 have not been repealed or modified by this Act. Therefore, Stewart Title Guaranty Company will continue to require the original POA (or if appropriate, a certified copy of POA already recorded in Florida) be recorded prior to the insured deed or mortgage.
CONTINGENT POWERS OF ATTORNEY §709.2108
A POA created on or after October 1, 2011, shall become exercisable upon execution and is ineffective if it provides for a contingency or future event prior to becoming effective (known as a contingent or "springing" power of attorney).
EXCEPTION: if the POA was executed prior to October 1, 2011, and provides for it to become effective upon the principal’s lack of capacity, it is effective upon delivery of an affidavit by a licensed physician having primary responsibility for the treatment and care of the principal which states the principal lacks capacity to manage property.
TERMINATION OF A POA §709.2109
A POA terminates and is no longer valid after any of the following events:
- The principal dies.
- The POA is not durable and the principal becomes incapacitated.
- Even if a power of attorney is durable, the principal is adjudicated incapacitated by a court. Once a case is filed to determine the principal’s capacity, the authority of the agent is suspended until there is a ruling.
- The principal revokes the power of attorney in a subsequently executed power of attorney (revocation is not automatic and must be specifically stated) or separate writing.
- The POA terminates pursuant to its terms.
- The purpose for which the power of attorney was created is accomplished.
- The agent may no longer act and the POA does not provide for successor agent.
- The attorney in fact is married to the principal and an action has been filed for the dissolution or annulment of the marriage or for their legal separation, unless the power of attorney provides otherwise.
WHO MAY SERVE AS ATTORNEY-IN-FACT §709.2105
- The attorney in fact must be a natural person who is at least 18 years of age or a financial institution having a place of business in Florida and is authorized to conduct trust business in Florida.
- Unless the POA states otherwise, if two or more persons are designated as agents each one may exercise its authority independently. §709.2111
AUTHORITY OF THE ATTORNEY IN FACT §709.2201
- An agent may only exercise authority specifically granted in the POA.
- A general provision in a power of attorney stating "my agent may do all acts in my place and stead as I could do personally" is insufficient, without more, to grant authority to the agent.
- The Principal must sign or initial next to certain specific grants of authority, not prohibited by the instrument, including the power to:
- Create an inter vivos trust.
- With respect to a trust created by or on behalf of the principal, amend, modify, revoke or terminate the trust, but only if the trust instrument explicitly provides for these powers.
- Make a gift (subject to restrictions).
- Create or change rights of survivorship.
- Create or change a beneficiary designation.
- Waive the principal’s right to be a beneficiary of a joint and survivor annuity, including a survivor benefit under a retirement plan.
- Disclaim property and powers of appointment.
NOTE: if the agent is not related to the principal, the agent may not use these powers to benefit himself or anyone to whom the agent has a support obligation.
EXCEPTIONS TO AGENT’S AUTHORITY §709.2114(1)(b) and §709.2201(3)
An agent may not delegate his or her authority under a POA. In addition, whether or not authorized in a POA instrument, an agent may NOT:
- Perform duties under a contract that requires personal services of the principal.
- Make an affidavit as to the principal’s personal knowledge.
- Execute or revoke the principal’s will or codicil.
- Exercise powers or authority held by the principal in a fiduciary capacity.
EXAMPLE: An Attorney in Fact may not execute a mortgage or deed where title is held by the principal as trustee of a trust. Only the acting trustee of a trust has authority over trust assets.
ACCEPTANCE OF A POA BY THIRD PARTIES §709.2009 and §709.2120
- A third party must accept or reject a POA within a reasonable time. Four (4) business days is presumed to be a reasonable time.
- A third party may require the attorney in fact to execute an affidavit stating where the principal is domiciled, that the principal is not deceased, that there has been no revocation or partial or complete termination by adjudication of incapacity or by the occurrence of an event referenced in the POA, that there has been no initiation of proceedings to determine incapacity, or to appoint a guardian of the principal.
- If the POA is not in English, a third party may require a verified English translation or request an opinion of counsel as to any matter of law concerning the POA if the request is made in writing.
- A third party may NOT require the use of a different POA form.
- If the third party rejects the POA, the reasons for the rejection must be in writing.
Grounds for rejection include:
- The third party is not otherwise required to engage in a transaction with the principal in the same circumstances.
- The third party has knowledge that the POA has been terminated.
- The attorney in fact refuses to provide a requested affidavit, English translation, or opinion of counsel.
- The third party in good faith believes that the POA is invalid or the agent lacks authority to perform the requested act.
- The third party has knowledge that a report has been made to the local adult protective services that the principal may be subject to physical or financial abuse, neglect, exploitation or abandonment by the agent.
STATUTORY PROTECTIONS - Section 709.2119 provides protections for third parties who, without notice, accept an invalid POA in good faith. The POA and the agent’s authority will be treated as genuine, valid and still in effect if:
- The POA appears to have been executed as required by law at the time of execution. §709.2119(1)(a)
- The third party relies in good faith on an English translation, opinion of counsel, or affidavit of an agent. §709.119(3) and §709.119(4)
EFFECT ON EXISTING POWERS OF ATTORNEY §709.2402
- With respect to formalities of execution, the Act applies to a POA created on or after October 1, 2011.
- With respect to all matters other than formalities of execution, the Act applies to a POA regardless of the date of creation.
- A POA existing prior to October 1, 2011, shall remain in effect.
STEWART TITLE GUARANTY COMPANY POLICY Stewart Title believes that it can and should maintain its existing underwriting requirements regarding the scrutiny required to accept a POA and still comply with the new law. Consequently, attached are our underwriting guidelines for insuring a transaction involving the use of a Power of Attorney. Also attached is an affidavit to be executed and recorded simultaneously with the insured documents. In the event you make the decision not to accept a POA, you may use the attached written notice as a guide to comply with the Act. Finally, please take time to review the statute and feel free to discuss issues as they come up with Stewart Title’s Florida Underwriting counsel.
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