Understanding the New Power of Attorney Law

Utah recently passed a new bill governing Power of Attorneys (POAs). Below are some important details and FAQs relating to the new POA law along with a few cautionary tidbits.

  • The new POA law applies to all POAs signed on or after May 10, 2016.
  • You can rely on a copy of a POA instead of require an original.
  • Under the new law, a POA must be notarized and signed by the principal or someone directed to sign on the principal’s behalf in the principal’s “conscious presence.”
  • Under the new law, a POA does not have to be recorded. However, it is always wise to record POAs. Washington County requires that POAs be recorded and your underwriter may too.

If a new POA grants “general authority” for an agent to act on behalf of a principal with respect to “Real Property,” how broad is that authority?

Under the new law, unless the POA states otherwise, general authority given to an agent with respect to real property gives the agent VERY BROAD power to (amongst other things) buy, sell, convey, mortgage, encumber, release, and/or assign a principal’s interest in real property. See Utah Code Ann. § 75-9-204

BEWARE: Determining whether to accept a POA should always be done on a case-by-case basis.

Am I protected under the new law if I rely on a notarized POA that has been forged or is invalid, void or terminated?

The new law provides that you can assume a signature is genuine and/or rely on a POA, if (1) it is notarized; and, (2) you accepted the POA in “good faith…without actual knowledge that the signature is not genuine” or that that “the POA is void, invalid, or terminated.”
See Utah Code Ann. § 75-9-119(2)&(3) and § 75-9-105.

BEWARE: Although the law provides some protection, it does not mean you won’t get sued. The above protection really only provides you with an additional defense in the lawsuit.

The new law says that I can be liable for refusing to accept a notarized POA, does this mean I cannot turn down a transaction that depends on a POA?

NO!!!!! It is true that the new law states we must accept a valid, notarized POA within 7 days after receiving it. However, under the new law, we CAN still reject a POA if: (1) we are not required by law to engage in business with the principal; (2) doing business with the agent or principle would be against federal law; or (3) we have actual knowledge of the POA or the agent’s authority being terminated. See Utah Code Ann. § 75-9-120