Power of attorney forms are frequently used in connection with real estate transactions. The New York Legislature recently passed amendments to the 2009 power of attorney law (NY General Obligations Law § 5-1501 et seq.) to correct a number of perceived problems that its 2009 statute created for various commercial and real estate transactions. On August 13, 2010, Governor David A. Paterson signed into law corrective amendments to the 2009 statute including a new provision (GOL § 5-1501C) specifying that the rigid disclosure and execution requirements imposed in the 2009 statute do not apply to "powers of attorney given primarily for a business or commercial purpose." The effective date of the revised provisions was September 12, 2010 (30 days from August 13), and the provisions apply retroactively to September 1, 2009 (except that powers of attorney validly executed under prior law will remain valid).
The 2010 amendments clarify ambiguities in the 2009 statute and specify that routine powers of attorney for certain commercial or business purposes do not need to comply with the statute’s extensive notification, content, formatting, notarization and witness requirements. Another major change in the new statute is the elimination of the presumption of automatic revocation of all prior powers of attorney previously executed by the same principal unless the principal affirmatively stated otherwise. The new statute also clarifies that a power of attorney executed in another jurisdiction in compliance with its laws or the laws of New York is valid in New York.
The broad exclusions specified in the 2010 amendments should relieve concerns about the need for most business transactions to comply with the rigid requirements set forth in the power of attorney statute. It is possible that further amendments to the power of attorney statute may be forthcoming as the Law Revision Committee is directed to study "all aspects of the implementation" of the new statute and to issue its final report on January 1, 2012.