Adam Leitman Bailey, P.C. Overcoming Obstacles: Power of Attorney
At Adam Leitman Bailey, P.C., we deal with closings and transactions of every nature. Closing by Power of Attorney has always been a common practice in real estate transactions, especially now during the pandemic. Parties who are unable to attend the closing personally could delegate such power to an agent to execute documents on their behalf at the closing table.
While it may be a seemingly straightforward delegation, New York has a unique set of guidelines and requirements. In addition to the modification made in June 2021 of the New York Power of Attorney Short Form, for real estate in particular, the property being transferred will also need to be mentioned in the Power of Attorney itself. For buyers who are purchasing with a mortgage, there are also bank-specific requirements, such as the lender’s name and loan number. The form must then be physically signed in front of two witnesses and a notary, and then delivered to the closing for recording.
Adam Leitman Bailey, P.C.’s Banking Department normally receives transaction specific Power of Attorneys for review and approval. As mentioned above, the document will list the property address, loan number and lender name for the particular transaction in closing. However, we do occasionally receive General Power of Attorneys for approval from a Principal who may not be available to sign due to a disability and has granted this right to an agent for multiple situations, not just the particular transaction we are closing.
The question arises when an individual is not able to physically sign due to a disability and their designated agent with general power of attorney is also not able to attend. In this situation, New York EPTL §5-1501B address how one should proceed. In summary, such agent will be able to designate another agent on the Principal’s behalf to sign all closing documents so long as such designation is done in the Principal’s presence and the Principal is able to verbally consent to the designation.
Specificities and requirements are often added for additional security and precaution, especially for major purchases such as real estate. However, such requirements may also create unintended layers of complication for people under certain circumstances. Here at Adam Leitman Bailey, P.C. we are dedicated to working with both Lenders and Borrowers to overcome such challenges and ensure closings proceed as smoothly as possible.