Blog by Andrew Peck

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"Question about power of attorney..."

"Question about power of attorney..."

"I have a listing signed under a power of attorney. Here’s the situation. The house is owned by husband and wife. The husband is out of the country so he gave his power of attorney to his wife for selling the house. Now the wife has to be out of the country so she has given her power of attorney to their daughter. Can the daughter sign the contract for both the husband and wife?"

Great question and my gut reaction was no, the power of attorney is only for the person named. I have since checked with a lawyer and he confirms that advice, however there is a possibility for a power of attorney to be assigned if the document allows for it.  So in this case, if the husband’s power of attorney to his wife had also stated that the wife could assign the power of attorney to a third party (the daughter) then this could have been done. Technically the daughter can sign the contract now for the mother.  From a practical point of view, I would have the daughter sign the contract for both the mother and father but I would insert a clause in the contract that explains that “the daughter is signing as power of attorney for the mother and upon the instructions of the mother for the father.  The buyer understands that the signature of the father or his attorney will be required to form a binding agreement.”

Another option in this situation is to have the listing salesperson sign for the father – the new rules of the Real Estate Council are clear about an agent signing for their client:

5-3 Signing agreements on behalf of clients
(1) Before signing a contract on behalf of a client, the licensee must have obtained written authorization for this from the client or an authorized agent of the client.
(2) For certainty, the authorization required by subsection (1) may be provided by a service agreement or separately.

In this case if the father had given a letter to the agent that stated that the agent could sign the contract on his behalf but only after consultation with eitherthe mother or the daughter, then this would be acceptable and the agent could create a binding contract for their client.  If you wish to be able to sign for your client, you would add a line to the listing contract that states: “The undersigned seller hereby authorizes the sales representative to sign contracts on behalf of the seller.”  My caution is that while it may be acceptable legally to sign, you must be very certain that the agreement you are signing is one that the seller will stand behind, otherwise, the seller might later deny that you made a good and sound decision on their behalf.  As a minimum, I would expect there to have been a telephone call with the seller, or for another family member to have given the instructions.  Royal Pacific will not accept an agency authorization to amend the listing contract by the salesperson unless there are clear written instructions from the seller that specifically allow the agent to make amendments to the listing, including specific instructions to allow or to restrict changing the asking price, the expiry date, or to amend the commission.  A letter from the seller such as the following would suffice:

To Royal Pacific Realty, and ____________________________ as salesperson;  further to the MLS listing signed by me on _______________, I hereby authorize_______________ (name of salesperson) so amend the listing contract as follows:
To increase or reduce the asking price of the property
To extend the termination date of the listing.
I do not authorize the salesperson to change the commission to be paid by me.  I understand that any changes made will be done only following a telephone conversation or as a result of an email discussion with the salesperson in which I will give such authorization for those changes.

Signed _____________ Witness _____________

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