Question

You are a recent real estate sales licensee. You have been approached by Bob, who wishes to purchase
a condominium for his elderly mother. He says he has authority to do so, as he has a “power of
attorney”. Explain the type of agency relationship created by a power of attorney. For Bob’s case,
discuss the legal limitations of power of attorney that he should be careful of.

real estate law (subject)

Answer 1

First of all we should know that e real estate licensee is person who has licence to sell property belonging to real estate ,it may be a house or it may be land or it may be a condominium ,i.e flat .

An agency relationship is a fiduciary relationship, where one person (called the “principal”) allows an agent to act on his or her behalf. The agent is subject to the principal's control and must consent to her instructions.

Agency relationships can be made through an express agreement, which means that both the principal and agent agreed to the agency relationship through a written or oral agreement. Agency relationships can also be made through an implied agreement. The person for whom the agent is acting is the principal. Parsing this definition reveals three primary elements of an agency relationship: (1) consent by the principal and the agent; (2) action by the agent on behalf of the principal; and (3) control by the principal.

Another question is that what will be the impact of agency relationship . So the answer is that The agent is obligated to act in the best interests of the principal because the agent's actions will create legal obligations for the principal. The agency relationship allows the agent to work on behalf of the principal as if the principal was present and acting alone.

Here in the above said case ,Bob is the the Principal for me and I am agent here for the above case .The relationship between principal and agent may be created in four ways: through express or implied agreement between principal and agent; under the doctrine of apparent authority; by operation of law; and through ratification of an unauthorised agent's acts by the Principal.

Most agency relationships are created on an express basis which means both parties will clearly state their intentions, such as when a licensee lists a seller’s home for sale.

The opposite of that would be an implied agency situation which is created by a person's actions. Implied agency is not where you want to be in real estate. An implied agency would be where a licensee says to a buyer, stick with me, I'll be sure to get you the best deal in town. The licensee is implying that the licensee is going to represent the buyer, but in fact that may not be the case without a signed, written buyer agency agreement. So, expressed agreements are where licensees should always be, meaning that the agreements are in writing and both parties are clearly stating their intentions.

Power of Attorney
Many times at closing, a seller, for example, cannot be there to sign the documents, so the seller would like to have someone else step in and sign their name on all of the legal documents at closing.

The seller can agree with someone else to become what is called their attorney-in-fact, which is a title given to someone who has received a power of attorney.
So, if the seller has a friend who is willing to sign their name on those closing documents, the seller would give the friend what is called a power of attorney document that needs to be signed, which allows a friend to sign the seller's name. So, the power of attorney is what authorizes someone to sign somebody else's name on their behalf. Someone who has the power of attorney is referred to or called an attorney-in-fact. The attorney-in-fact, is simply the title given to someone who has this power of attorney.

One of the fundamental rules governing an agent’s power is that they are expected to act in their principal’s best interest.

An agent cannot :
1)Change a principal’s will.
2)Break their fiduciary duty to act in the principal’s best interest.
3)Make decisions on behalf of the principal after their death. (Unless the principal has also named the agent as the executor of their will or the principal dies without a will and the agent then petitions to become administrator of their estate.)
4)Change or transfer POA to someone else. An agent has the right to decline their appointment at any time. However, unless the principal named a co-agent or alternate agent in the same POA document or is still competent to appoint someone else to act on their behalf, an agent cannot choose who takes over their duties.