Lender Responsibility: New Durable Powers of Attorney, Part Two

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Continuing our discussion on requirements concerning durable powers of attorney, we’ll take a look at grounds for refusing to accept a durable power of attorney, civil liability and other useful information.  For more information check out our Resources page, and use ‘durable powers of attorney’ in the search terms.

Grounds for Refusing to Accept a Durable Power of Attorney

  • The grounds for refusing to accept a durable power of attorney are limited to those listed in new Section 751.206 of the Estates Code. (See the Exhibit attached to the summary link above for the complete list of these grounds.)
  • The refusal must be in a written statement advising the agent of the reason(s) for the refusal and must be provided to the agent on or before the date the mortgage lender is otherwise required to accept the durable power of attorney.

Civil Liability

  • Failure to timely or properly accept or reject a durable power of attorney may subject a mortgage lender to civil liability for attorney’s fees, court costs and an order to accept the power of attorney.

Photocopy or Electronically Transmitted Copy of a Durable Power of Attorney

  • Except as otherwise provided by statute other than the Durable Power of Attorney Act in Chapters 751 and 752 of the Estates Code or by the durable power of attorney, a photocopy or electronically transmitted copy of an original durable power of attorney has the same effect as the original instrument and may be relied on, without liability, by a mortgage lender who is asked to accept the durable power of attorney to the same extent as the original.

Review of Power of Attorney by Black, Mann and Graham

  • For this firm to review a durable power of attorney for a client, the following requirements must be met:
    • We must receive a complete and legible copy of the power of attorney and supporting documentation necessary to review it within the required period for acceptance or rejection.
    • If we provide you with a conditional acceptance, you must confirm satisfaction of the condition(s) or, if not satisfied, reject the power of attorney before the end of the required period for acceptance or rejection.
    • If we reject a power of attorney, it is your responsibility to timely and properly send the agent the written statement of refusal.
    • We will not be responsible for rejecting a power of attorney based on any grounds for refusal within your knowledge and not timely communicated to us in writing.

As always, we’re happy to provide clarity on these and other topics.