Below is the fourth in our multi-part series on the North Carolina Power of Attorney, which is part of a larger series on essential NC Estate Planning tools.
A North Carolina Power of Attorney in often used in connection with a real estate transaction. The North Carolina Legislature amended North Carolina Gen. Stat. 47-28, the statute dealing with a North Carolina Power of Attorney, to both clarify the statute and address a reoccurring issue that arises, which was not previously anticipated. The modernization of the notary statutes spawned a clash between those statutes and the old Power of Attorney statute which allowed the agent or attorney to file the Power of Attorney in the county where the property was located, or, “if it does not relate to the conveyance of any estate or property, then in the county in which the attorney resides or the business is to be transacted.” This, in turn, spawned different interpretations of where to file a North Carolina Power of Attorney in connection with a real estate transaction. Some interpreted the quoted language above to mean that it was enough to record the NC Power of Attorney in the county where the agent did business and not in the county where the property was located. Also, the modern generic notary acknowledgement form in N.C. Gen. Stat. 10B-41 contains no section pertaining to the recording information of the Power of Attorney. This meant that sometimes a deed was produced with no way to know who had authority to act as the attorney-in-fact in relation to the property.
Moreover, by recording the Power of Attorney where the attorney-in-fact conducts business and not where the property is located, the attorney-in-fact can be vulnerable. This is because the main purpose of recording the Power of Attorney is to make sure that there is evidence of the principal’s authorization of the agent to act on his or her behalf and if the Power of Attorney is only recorded in the county where the agent does business without a reference to the Power of Attorney in the deed, there is no way for the title searcher to tell whether or not the agent actually has authority unless they search through all 100 counties. While some NC attorneys recognized this problem and made sure to avoid it, others did not. Thus, the need for the amended N.C. Gen. Stat. 47-28 addressing and fixing the problem.
The new statute reads:
(a) Recording required for powers of attorney affecting real property:
(1) Before any transfer of real property executed by an attorney-in-fact empowered by a power of attorney governed by Article 1, Article 2, or Article 2A of Chapter 32A of the General Statutes, the power of attorney or a certified copy of the power of attorney shall be registered in the office of the register of deeds of the county in which the principal is domiciled or where the real property lies. If the principal is not a resident of North Carolina, the power of attorney or a certified copy of the power of attorney may be recorded in any county in the State wherein the principal owns real property or has a significant business reason for registering in the county.
(2) If the real property lies in more than one county or in a county other than where the principal is domiciled, the power of attorney or a certified copy of the power of attorney shall be registered in the office of the register of deeds in one of the counties, and the instrument of transfer shall refer to the recordation specifically by reference to the book, page, and county where recorded.
(3) Any instrument subject to the provisions of G.S. 47-17.2, 47-18, or 47-20 and signed by an attorney-in-fact and recorded in a county other than the county where a power of attorney is recorded in this State shall include the recording information, including book, page, and county for the power of attorney.
(4) The failure to comply with the provisions of this subsection shall not affect the sufficiency, validity, or enforceability of the instrument but shall constitute an infraction.
(b) If the instrument of conveyance is recorded prior to the registration of the power of attorney or a certified copy of the power of attorney pursuant to subsection (a) of this section, the power of attorney or a certified copy of the power of attorney may be registered in the office of the register of deeds as provided in subsection (a) of this section thereafter provided that the attorney-in-fact was empowered at the time of the original conveyance. Notwithstanding the provisions of subsection (a) of this section, no conveyance shall be rendered invalid by the recordation of the power of attorney or a certified copy of the power of attorney after the instrument of conveyance, and the registration shall relate back to the date and time of registration of the instrument of conveyance.
(c) The provisions of subsection (a) of this section shall apply to all real property transfers utilizing an authority under any power of attorney whether made on or after April 1, 2013, and the provisions of subsection (b) of this section shall apply to all real property transfers utilizing an authority under any power of attorney whether made before, on, or after April 1, 2013.
N.C. Gen. Stat. § 47-28 (2013)
To ensure compliance and limit liability on each transaction where a North Carolina Power of Attorney is used in connection with a real estate transaction (and to make the title searcher happy), it would be a best practice to put the NC Power of Attorney recording information in every deed. This is true even if the Power of Attorney is recorded in the same county that the transaction takes place.