Can a power of attorney sell real estate without the principal’s consent?

The person being represented by the power of attorney is of sound mind and capable of making financial decisions. The power of attorney sold property without consent to do so.

Asked on February 25, 2019 under Real Estate Law, Indiana

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 1 year ago | Contributor

Yes and no.
1) If the power of attorney gave the agent or attorney-in-fact (those are the terms for the person given power by a POA) authority over real estate (which many, but not all, POAs do: a POA can be limited in terms of the power they grant) then the agent could sell the real estate and the sale and would be valid, since the agent had the power to do this. An agent is not required to get the specific consent of his or her principal for every transaction, since the entire point of a POA is to authorize the agent to act for the principal without the principal's direct involvement. The agent may do any act(s) within the scope of the POA.
Since the sale, if the agent had power under the POA, would be valid if sold to an innocent third party (see below), the sale cannot be undone or voided.
(This actually a reason why a person should NOT give a POA out in most situations; to avoid giving another person authority over your assets and finances.)
2) However, agents or attorneys-in-fact are fiduciaries: they are bound by a duty of loyalty to their princinal and must act in the principal's best interests; must try to carry out the principals wishes, to the extent they are known; and may not put their owner interests ahead of the interest of the principal or engage in "self dealing," or benefiting themselves at their principal's expense.
If the agent acted to benefit him/herself at the principal's expense, such as by buying the property him/herselt at a favorable price, selling at a favorable price to a friend or family member, getting a commission or "kickback" on the sale, pocketing money from the sale, etc., the principal can sue his/her agent for compensation. And if the person who bought the house was not an innocent third party but was or was working with the agent, then in that case, that wrongdoing may allow the principal to bring a legal action to invalidate the sale.


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