Ask Texas REALTOR®

Q   Recently, a contract was returned to our office with the initial and signature lines executed by the seller’s broker agent, who wrote: "(Seller’s Name) by (Broker’s Name) as broker/agent per telephone authority." I have also received documents where one party was instructed by their agent to sign or initial for another party (usually a spouse or parent) and then write "per verbal authority."  I’m certain these are not enforceable contracts, but these actions put me in the position of trying to hold a deal together while arguing with an agent who claims that everyone does this and accuses me of being hard to work with. What can I do?

A  Neither an agent, spouse, parent nor anyone else may sign a contract on someone else’s behalf unless they have the legal authority to do so. Typically, evidence of a power of attorney will be necessary to establish such legal authority. When someone does sign a contract on another’s behalf, you should request a copy of the power of attorney. If that person does not have a power of attorney, you should advise your client that enforcement of the contract may be difficult. Failure to have a power of attorney evidencing such authority places significant risk on the various persons in the transaction, including the brokers. You may want to encourage the other agent to use a fax or overnight delivery service to expedite the process of getting proper signatures on the documents. Remember that just because several people engage in an activity and call it common practice, that does not reduce your risk nor relieve your duties to protect the interests of your client.

Have a question about finances, licensing, technology, marketing, or other real estate issues? Ask Texas REALTOR® by sending e-mail to texasrealtor@texasrealtors.com or fax to 512/370-2390. Not all questions can be answered.

Illustration © Artville.

Buyers & sellers, visit www.texasrealestate.com.
REALTORS®, visit www.texasrealtors.com.