INDUSTRY NEWS: Title Industry is Essential!
August 14, 2020
UNDERWRITING Q&A: Is title derived from a Beneficiary Deed insurable in Colorado?
August 20, 2020
A: We will recognize the delegation of real property powers in accordance with Section 113.018 of the Texas Property Code (see below) by a Trustee of a trust provided that the Power of Attorney is: (i) specific to the transaction and recites the legal description and sales price; (ii) refers to the authority granted in Sec. 113.018 of the Property Code; and (iii) is executed and acknowledged no more than six (6) months prior to the date of closing and recordation.
We would be willing to recognize the delegation of real property powers by a duly appointed Independent Executor of a pending estate provided: (i) the Will was admitted to probate within the last two (2) years; (ii) the probated Will granted the Independent Executor the powers of a trustee under the Texas Trust Code; (iii) the Power of Attorney is specific to the transaction with a legal description and sales price recited; (iv) the Power of Attorney refers to the authority granted in Sec. 113.018 of the Property Code; and (v) the Power of Attorney is executed and acknowledged no more than six (6) months prior to the date of closing and recordation.
FNTI will require a new Power of Attorney per transaction. A Power of Attorney executed in accordance with Sec. 113.018 would terminate in six (6) months, or on a date specified that is earlier than the six (6) month period, and upon the death, incapacity, resignation and/or removal of the Trustee/Independent Executor.
If you have any questions concerning the compliance of the Power of Attorney with the above stated underwriting guidelines, please contact an underwriter.
Sec. 113.018. EMPLOYMENT AND APPOINTMENT OF AGENTS. (a) A trustee may employ attorneys, accountants, agents, including investment agents, and brokers reasonably necessary in the administration of the trust estate.
(b) Without limiting the trustee’s discretion under Subsection (a), a trustee may grant an agent powers with respect to property of the trust to act for the trustee in any lawful manner for purposes of real property transactions.
(c) A trustee acting under Subsection (b) may delegate any or all of the duties and powers to:
(1) execute and deliver any legal instruments relating to the sale and conveyance of the property, including affidavits, notices, disclosures, waivers, or designations or general or special warranty deeds binding the trustee with vendor’s liens retained or disclaimed, as applicable, or transferred to a third-party lender;
(2) accept notes, deeds of trust, or other legal instruments;
(3) approve closing statements authorizing deductions from the sale price;
(4) receive trustee’s net sales proceeds by check payable to the trustee;
(5) indemnify and hold harmless any third party who accepts and acts under a power of attorney with respect to the sale;
(6) take any action, including signing any document, necessary or appropriate to sell the property and accomplish the delegated powers;
(7) contract to purchase the property for any price on any terms;
(8) execute, deliver, or accept any legal instruments relating to the purchase of the property or to any financing of the purchase, including deeds, notes, deeds of trust, guaranties, or closing statements;
(9) approve closing statements authorizing payment of prorations and expenses;
(10) pay the trustee’s net purchase price from funds provided by the trustee;
(11) indemnify and hold harmless any third party who accepts and acts under a power of attorney with respect to the purchase; or
(12) take any action, including signing any document, necessary or appropriate to purchase the property and accomplish the delegated powers.
(d) A trustee who delegates a power under Subsection (b) is liable to the beneficiaries or to the trust for an action of the agent to whom the power was delegated.
(e) A delegation by the trustee under Subsection (b) must be documented in a written instrument acknowledged by the trustee before an officer authorized under the law of this state or another state to take acknowledgments to deeds of conveyance and administer oaths. A signature on a delegation by a trustee for purposes of this subsection is presumed to be genuine if the trustee acknowledges the signature in accordance with Chapter 121, Civil Practice and Remedies Code.
(f) A delegation to an agent under Subsection (b) terminates six months from the date of the acknowledgment of the written delegation unless terminated earlier by:
(1) the death or incapacity of the trustee;
(2) the resignation or removal of the trustee; or
(3) a date specified in the written delegation.
(g) A person who in good faith accepts a delegation under Subsection (b) without actual knowledge that the delegation is void, invalid, or terminated, that the purported agent’s authority is void, invalid, or terminated, or that the agent is exceeding or improperly exercising the agent’s authority may rely on the delegation as if:
(1) the delegation were genuine, valid, and still in effect;
(2) the agent’s authority were genuine, valid, and still in effect; and
(3) the agent had not exceeded and had properly exercised the authority.
(h) A trustee may delegate powers under Subsection (b) if the governing instrument does not affirmatively permit the trustee to hire agents or expressly prohibit the trustee from hiring agents.
