“I’M SELLING MY MOTHER’S HOUSE”: NOT SO FAST

As you know, we take calls from agents and managers on a daily basis.? Those calls address multiple issues, from disclosure to contract problems.? In addition to the issue which caused the manager to call, however, it is not unusual that our conversation reveals additional problems that we need to be aware of.? For example, we often receive calls that turn up a title issue that the agent was unaware of.? Specifically, as the agent is giving us the background of the transaction, and working his way to the question on his mind, he will often tell us that he is dealing with the seller’s son or daughter because the seller is “elderly” or has passed away.? Based on those facts, and the verbal statements of the child, our agent is proceeding to market the property without asking any questions about title.? In fact, we often discover that the child is the one who signed the listing agreement even though title is still in the name of the parent.? Of course, proceeding in this way can lead to significant problems.

Specifically, just because my parent owns a property does not mean I can sell it, even if my parent is elderly or has passed away. Rather, there needs to be written, legal authority for the child to act on behalf of her parent.? If the parent is elderly, the most obvious way to get that authority is through a Power of Attorney (“POA”).? If the child delivers one to you, and Cal Title tells you it is enforceable, then you are fine to proceed.? The child signs in the parent’s name, as “attorney in fact,” and can sell the property. Of course, our deals are seldom that easy.? Rather, we often see the case where there is no POA and the parent is no longer coherent.? In that case, the child would have to go to court and have the parent declared incompetent.? If that happens, the child could give you a Court Order creating a conservatorship and confirming that they are entitled to act for their parent.? Without such a document, however, they have no legal authority.

If the parent has died, you are faced with a multitude of issues.? Is there a will, and what does it say about the property?? Does it give the executor of the estate the power to sell the property?? Does the estate have to go through probate?? Is there a surviving spouse that may now have control of the property?? In this type of case, you need to have the child you are dealing with speak to the parent’s estate lawyer and determine what needs to be done before the property can be sold.? Estate and Probate law is very complicated and you cannot just proceed because the child tells you to.? Further, make sure to talk to your Cal Title representative to determine if the child’s signature will be insurable.? They will often be able to identify problems for you and help you fix it if necessary.

In short, remember that title to a property is determined by the documents and you cannot assume that a child ever has the right to sell their parent’s property.? Ask them where their authority comes from and ask for a document proving that authority.? Then, show it to Cal Title so they can confirm it is ok to proceed.? Regardless, you can’t assume that a child can sell their parent’s property.? Making that assumption can result in a lot of wasted time and problems with an upset buyer who ultimately can’t receive title to the property.? So do your due diligence up front and avoid these problems.