Q: Our parents have retired and live clear across the country in California. They are selling the family home in the Washington area. We made all of the arrangements for the sale and settlement is to take place soon.
Do our parents have to come all the way back here to attend the settlement? Our parents lived in the house for almost 40 years, and they really don't want the emotional stress and strain.
A: The answer is quite simple. Have your attorney prepare a document known as a "power of attorney," in which your parents would authorize one of you to sign all legal documents to convey the property. A power of attorney is a written document whereby one person, as principal, appoints another as his or her agent (attorney) and gives that agent the authority to perform certain acts on behalf of the principal. The written document itself is the power of attorney. In many parts of the country it is called a "letter of attorney."
The power of attorney can be general, special or mixed. A general power of attorney gives the agent the broadest possible powers to act on behalf of the principal. The attorney acting under this general authority usually can sign deeds or other legal papers, and the principal will be bound by the acts of the agent.
In a special power of attorney situation, the principal authorizes the agent to take certain actions: actions that are specified in the document itself--for example, to sell the house located at 1234 X St. in Fairfax for the price of $235,000. The agent must be quite careful not to exceed or deviate from the authority given in the written instrument.
The rules for powers of attorney vary from state to state. Here is a summary analysis of the power of attorney laws in all of the three surrounding jurisdictions.
* In Virginia, as long as the agent has a general power of attorney, the agent has authority to sign a deed--and a deed of trust--on behalf of the principal. There are specific rules and requirements as to how the agent should sign, and these should be reviewed before the power of attorney is executed by the principal.
* In Maryland, a deed can be transferred by a power of attorney, but the attorney-agent must act under authority of a special power of attorney. This document must authorize the agent specifically to sign a deed for the property in question. Additionally, the power of attorney must be recorded among the Land Records in the appropriate county in Maryland before the deed signed by the attorney will be valid.
* In the District, powers of attorney for the sale of real estate only recently became the law. There is special language, however, that is required to be on the top of the power of attorney document, and the Recorder of Deeds will not accept the power without this important language.
Thus, your parents do not have to make the trip back to this area. A power of attorney can be prepared, which should be sent to your parents as soon as possible. They will have to sign the document, have it notarized and then return it to you.
When you go to settlement, you must give the settlement attorney the original signed and notarized document. The attorney will have to record it among the land records where the property is located, before recording the deed of conveyance.
Not everyone wants to give a power of attorney for the sale of real estate. Some people like to sign their own documents, especially the deed to their property. But you can also make arrangements with the settlement attorney to send your parents--by one of the special courier services used by settlement attorneys--all documents they will have to sign. Those documents will also have to be notarized--and specific, clear instructions must be put on every page where a signature is required. Your parents should then send the papers back to you--not to the settlement attorney--and you can take them to the settlement.
Here's a tip, however. You should be present at settlement to make sure that all of the papers are in order. Make sure that your parents are available by telephone in case questions come up. Settlements, in my opinion, are the beginning and the end of a process. Many times questions come up that can be answered only by the owner, such as when a backyard fence was installed, who services the boiler or who the neighbors are.
All too often, buyers and sellers take settlement proceedings for granted. However, it is a very important step in the process of buying or selling a house and must be treated with respect.
Kass is a Washington lawyer. For a free copy of the booklet "A Guide to Settlement on Your New Home," send a self-addressed stamped envelope to Benny L. Kass, Suite 1100, 1050 17th St. NW, Washington, D.C. 20036. Readers may also send questions to him at that address.