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Spouses POA will not be accepted by title company!

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Aggie,

1. Why did the title company refuse to accept the DPOA? What was the specific reason? Was the DPOA executed when the spouse had been diagnosed with ALZ, and/or wasn't cognizant to execute legal documents. If so, how would the title company have obtained that information?

2. Using a DPOA for legal and financial transactions is exactly the way the transaction should be handled, so I'm really confused why a title company took this position. You're entitled to an explanation.

3. Is it a small, little known company or one of the larger major title insurers?
Was it your choice or the realtor's? Realtors often have their own preferred title companies with which they've been doing business for years and it may be one owned by the realtor's relative, or something like that. Major title companies would know how to handle this kind of situation, unless there were some defect in the DPOA, such as improper execution.

4. What's the status of the sale? If a purchase agreement has been executed, the spouse would have had to invoke his/her authority in order to sign for the spouse with Alz. Then the selling realtors would forward documents to a title company with the request for a title commitment.

Title commitments show and identify exceptions that need to be addressed.

E.g., if there was a lien, the remedy might be described as requiring a discharge of lien for lien recorded at ....(insert details).

For the Alz issue, it should have provided a description of what it WOULD accept as execution of a warranty deed on behalf of the spouse with ALZ.

5. I've worked on a lot of commercial real estate transactions, and a lesser amount on residential transactions. I've never encountered a situation where a title company refuses to accept something, WITHOUT offering an alternative solution.

So the alternate way would be to ask, via e-mail or other written communication, what the title company WOULD accept. Put the onus on the title company to explain what it wants.

6. It might also require an opinion letter from the attorney who prepared the DPOA, affirming that it does contain the requisite authority for the spouse to sign on behalf of the other spouse.

I look forward to more information; this is an interesting issue and I'm really curious as to why a title company took what I would consider to be an unusual stance.
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GardenArtist, decades ago I was using a POA for my then husband as we were buying an investment property and he didn't want to take time off from work to attend. Turned out the title company wouldn't accept the POA due to the wording, so we had to scramble to have a new one drawn up that was acceptable.

So that was a lesson learned, thus any time I had a client who's spouse or relative wasn't going to be at closing, I had them use the title company's form. That was back before such things as FedEx overnight delivery and docu signed documents, which makes live so much easier :)
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Windy, I wasn't aware of that issue - very interesting. In my experience, when a title company has to "ensure over" an issue, it requires an affidavit from the seller....e.g., if the seller has had work done to upgrade the property within the last 90 days (at the time the outside deadline in Michigan for filing of liens), the title company would require an Owner's Affidavit that there were no outstanding payments due or pending liens...generally to that effect).

If the potential of MERP lien exists, the spouse of the joint owner may or may not really understand the situation enough to provide an Affidavit. And such an Affidavit might not really be reliable, depending on the situation.

I thought though that Igloo mentioned somewhere on another post that Medicaid files liens against property when it begins funding care. Igloo, are you here to answer this?

I hope Aggie comes back and provides more information. This is an interesting issue that could affect a lot of folks here.
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Garden - just how MERP is done depends on your state & its laws. For TX, there is a specific 1 page form that has a check off on the status of the property to estate recovery. One box is " release of claim" and that needs to get filed at CH.

For TX merp is a claim against the estate and not a lien. Which is a different kind of creature. It seems to sit in limbo till death (I like to think of this phase as a claim in the elysian fields or the river Styx or purgatory depending on my mood!) then becomes an active claim. If you do probate, it's a class 7 claim for TX. TX allows for a 4 yr run for probate. Now if no will (so no probate available), then for TX it's a intestate death and for those all assets escheat to the state so state in control of property from the get-go. I think this would be the most difficult situation to deal with MERP from as you have to prove lineal heirship first.

As an aside on this, one factor in folks not rebuilding after Katrina was that many properties never went through probate years before, family just continued to live in grannies or Aunties house. Bills & taxes paid but no legal ever filed. After katrina lots of programs offered. But to get any grants, SBA, loans, etc you had to prove ownership...so hello lineal heirship and invariably there would be heirs who had judgements or refused to sign without getting their supposed share first or could not be found. I can foresee this situation being an issue for MERP.
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You may need a court order for the title company. They are on th hook if fraud is involved, so it doesn't surprise me that much. DPOAs are not the be all no all we think they should be. You MIGHT try a new title company. Otherwise contact a real estate attorney. He's no doubt seen this many times before.
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Maggie, if I remember correctly, you were a realtor for several years. Did you ever encounter this kind of refusal, and if so, was it because of fraud? It never occurred to me that a title company might be concerned about fraud when presented with a DPOA from a spouse. Good catch!
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Aggie, just because there is a Power of Attorney, it does not mean that the title company will allow it to be used for the sale of a property. If you plan on using a Power of Attorney for an individual with dementia there will be questions asked.

One that comes to my mind is the second home in another State, and the POA was written from a different State? How long ago was the POA signed? Did an attorney draw up the document or was the document from a website? How will be the funds be disbursed? What is your relationship to the other deed owner?

When dementia is involved, there is always a concern that the principal may not have been competent at the time the Power of Attorney was executed. A note from the doctor who diagnosed the dementia would be helpful.

If the title company stills refuses the POA, a guardian or conservator will need to be appointed by the court. [above source in part: Federal Title.com]
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? - is your spouse in a Al or NH?

I'm wondering if the title co reticent is not about the signature per se but more about a concern on claims or liens or other clouds on the property. There was an article on medicaid / MERP and title insurance in Stargazer (title company assocation newsletter) a couple of years back on title co having to ensure no MERP issues for property sold by anyone 55 or more with an owner in a NH.
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Igloo, I'm going to make sure that if I ever have to have Medicaid, I won't die in Texas or LA!
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