Sometimes we have clients who hold their home’s title in a Trust, Estate, Corporation, Conservatorship, or are getting divorced. When this is the case, we often get the question, “Who can sign the documents?” To answer this question, we reached out to Doug Bergner, Senior Vice President at Equity Title Agency, Inc. Below is his advice on what you will need to do should you find yourself in any of these situations.
The manner in which real property is titled can be critical to keeping title clear of “clouds” or flaws. In order to have a properly titled and insurable deed to your property it must be executed by the party who has the actual legal authority, under the laws of the State, to convey the title. Additionally, all parties with any interest in the property must be accounted for. Proper, authorized signatures are critical in the real estate closing, but it is not always evident in some cases who is the authorized party. How do you know who is authorized to sign the Deed as the Grantor? While each situation can be different, the following may be used as a guide.
Power of Attorney (POA) – The “Attorney-in-Fact” may sign for the Principal provided the POA is properly signed by the Principal and an unrelated witness. The signatures of both the witness and the person granting the signing authority must be notarized. In most cases the POA must specifically grant the power to sign for the sale of Real Property. POA’s should be recently executed and specific to the transaction. All Power’s of Attorney must be approved by the Title Insurance Underwriter prior to use, and the Title Company will require the Attorney-in-Fact to sign an “Affidavit of Attorney In-Fact” prior to the closing, stating that the principal is still alive and that the POA has not been rescinded.
Trust – Only the named Trustee(s), or properly installed Successor Trustee(s) may sign to convey property out of a Trust and the Trust must be named exactly as it is shown on the Seller’s current deed. The Trust Agreement controls the activities of the Trustee(s) and any authority granted must be clearly stated in the Trust Agreement. The Title Company may not need to see the entire Trust, but might need to see specific passages regarding the powers of the Trustee and any instructions for the installation of a successor trustee if the original Trustee is incapacitated or deceased. If there are multiple Trustees, it must be determined if the Trust provides for the Trustees to act independently or if the signatures of all Trustees are required. In most cases the Trustee(s) will be required to sign a “Trust Certification” prior to closing. A Trustee may not give a POA to any other party unless the Trust Agreement specifically provides for it.
Estate – Generally, a probate will be required prior to conveying Real Property out of an estate. The Probate will name a Personal Representative who has the authority to sell and sign conveyance documents. A Will, by itself, does not grant the power to sell. If the value of the deceased’s estate is less than $75K after liens and encumbrances, then a properly filed Affidavit of Sucessor may be allowable, subject to Underwriter approval.
Divorce – A Divorce Decree may or may not be sufficient to authorize a person to sell property jointly owned prior to divorce. Decrees can be worded in several ways: 1. “The Court grants and conveys to Jane Doe the property at 123 E. Elm St” does constitute a legal conveyance as long as the document is recorded. 2. “The Court awards the property to Jane Doe” is nothing more than an order by the Court that Jane should have the property. This Decree will require that the husband execute and record a Deed conveying the property to Jane. It is best to determine the need for a deed from an ex-spouse during the listing period.
Corporation – Whenever a Corporation, LLC, Partnership or other legal entity sells Real Property, a Corporate Resolution naming the authorized signor must be provided. The Resolution must be signed by an officer of the corporation who is not the named signor. Additionally, the entity must be legally authorized to conduct business in Arizona and provide Articles of Incorporation, Partnership or Operating Agreements, or other controlling documents, as applicable.
Conservatorship – If the seller is a “protected person” they will have been assigned a Conservator or Guardian by the Court. Only the Court appointed Guardian may sign for the protected person. A signature from the Protected person can not be honored.
Any deed not signed by the proper entity could create a flawed title that could require significant time and expense to resolve. In a worst case scenario the buyer could be left with only partial interest in the property. It is best to ensure that all titled owners, or their legally authorized representatives are available and willing to sign the documentation needed to close the sale. If you have any questions about any of this information, please contact Maggie Clark with Equity Title at firstname.lastname@example.org. If you need help buying or selling a home in the Phoenix Metropolitan Area, feel free to reach out to us at www.thehillgroupaz.com.