The pitfalls of powers of attorney in real estate closings and what North Carolina attorneys and paralegals should watch for.

In North Carolina real estate closings, a properly executed Power of Attorney (POA) can be a valuable tool—it’s the key to keeping deals moving when principals are unavailable. But relying on outdated, overly broad, or technically deficient POAs can leave the transaction stuck at the lock.

Whether you’re working on a residential purchase or a complex commercial transfer, it’s critical to recognize where POAs go wrong—and how to ensure they’re enforceable and insurable under North Carolina law.

We’ve put together a quick dive into the key risks and best practices when handling POAs in real estate deals:

Old POAs Aren’t Always Good POAs

In North Carolina, the Uniform Power of Attorney Act (UPOAA) took effect on January 1, 2018 (see N.C.G.S. § 32C). POAs executed after that date must comply with the new statutory framework, while those created before may still be valid, but they come with baggage.

Why it matters:

• Post-2018 POAs must explicitly grant authority over real property transactions.

• Pre-2018 POAs can raise underwriting red flags if they lack specificity or were drafted under now-superseded statutes.

Key Tip: If you’re relying on a POA executed before 2018, scrutinize the language, and be ready for pushback from underwriters.

Generic Language = Specific Problems

A POA that says the agent may “handle financial matters” or “act in my best interest” is not sufficient to convey title, sign deeds, or encumber property.

Under N.C.G.S. § 32C-2-204: The power to conduct real estate transactions must be specifically enumerated, not implied.

Look for:

• Clear authority to buy, sell, mortgage, lease, or convey real property.

• Property descriptions when the POA is tied to a specific transaction.

• Signatures that are properly notarized—a missing seal can void the instrument’s recordability.

  
  

Recording Requirements: Don't Miss the Paper Trail

North Carolina requires that a POA used in a real estate transaction must be recorded in the county where the property is located before or at the same time as the deed or instrument executed under it. Translation: If the POA isn’t recorded, the deed isn’t valid.

Lock it in: Confirm the POA is in recordable form before the deed hits the Register of Deeds office. Missing this step can delay—or even invalidate—a closing.

Revoked or Expired? That’s a Hard Stop

POAs may be revoked by the principal or automatically terminated by death, incapacity (in non-durable POAs), or the passage of time if a sunset clause is included.

Best practice: Obtain an Affidavit of Non-Revocation or similar statement from the agent to certify that the POA is still in effect.

Some title insurers may require this affidavit every time a POA is used, even if it was recently executed.

Best Practices for a Smooth Closing

To avoid last-minute surprises, here’s what real estate attorneys and paralegals in North Carolina should keep in mind:

• Use the statutory short-form POA (available in N.C.G.S. § 32C-3-301) when possible—it’s tailored for NC and familiar to underwriters.

• Review and record the POA early in the transaction process, especially for remote sellers or family representatives.

• Communicate with your title provider—many will review POAs in advance to confirm insurability.

When used properly, a POA can unlock flexibility for your clients and keep a deal on track. But one wrong clause—or one missing recordation—can bring everything to a halt.

Need Help Evaluating a POA Before Closing?

Key Title works closely with real estate professionals across North Carolina to review, record, and clear title for even the most complex deals. We know where the traps are—and how to keep you out of them.