Texas Power Of Attorney
Q: I have something wondered that : What is the liability associated with being "power of attorney" on a purchase and sales agreement? and why??? Can anyone give me some suggestion or advice??? I'm living in Texas now.
A: Here's why: An associate of mine found a pre-foreclosure house and contacted the owner about putting it under contract for the principal owed and retailing it for market value. He found a buyer and the purchase and sales agreement was drawn up reflecting a transaction between Mortgage Holder and new buyer with the Investor as limited P.O.A. (he had the original/current mortgage holder sign a limited power of attorney to him so he could sign the closing papers, avoid seasoning issues and to direct the proceeds of the transaction.) Unfortunately, the day before close a lien popped up on the title which clouded it to the extent that the sales price would not cover the principal owed. The buyer, rightfully claims default of the contract and breach. Considering that the "power of attorney" is the only relationship my friend has to the transaction, what is the liability of his status? I say an intermediary is "usually" not liable to a third party for the actions of a principal,and that he should worry more about his liability with the grantor of the limited power of attorney.