N.Y. General Obligations Law § 5-1504: Acceptance of and reliance upon acknowledged and witnessed statutory short form power of attorney

§ 5-1504. Acceptance of and reliance upon acknowledged and witnessed

statutory short form power of attorney. 1. (a) For purposes of this

section, "acknowledged" means purportedly verified before a notary

public or other individual authorized to take acknowledgements. For

purposes of this section, "witnessed" means purportedly witnessed by two

persons who are not named in the instrument as agents or as permissible

recipients of gifts.

(b) A person that in good faith accepts an acknowledged and witnessed

power of attorney without actual knowledge that the signature is not

genuine may rely upon the presumption that the signature is genuine.

(c) A person that in good faith accepts an acknowledged and witnessed

power of attorney without actual knowledge that the power of attorney 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 upon the power of

attorney as if the power of attorney were genuine, valid and still in

effect, the agent's authority were genuine, valid and still in effect,

and the agent had not exceeded and had properly exercised the authority.

(d) A person that is asked to accept an acknowledged and witnessed

power of attorney may request, and rely upon, without further

investigation:

(1) an agent's certification under penalty of perjury of any factual

matter concerning the principal, agent or power of attorney; and

(2) an opinion of counsel as to any matter of law concerning the power

of attorney if the person making the request provides in a writing or

other record the reason for the request.

(e) An opinion of counsel requested under this section must be

provided at the principal's expense unless the request is made more than

ten business days after the power of attorney is presented for

acceptance.

(f) For purposes of this section, a person that conducts activities

through employees is without actual knowledge of a fact relating to a

power of attorney, a principal, or an agent if the employee conducting

the transaction involving the power of attorney is without actual

knowledge of the fact after making reasonable inquiry with respect

thereto.

2. No third party located or doing business in this state shall

refuse, without reasonable cause, to honor a statutory short form power

of attorney properly executed in accordance with section 5-1501B of this

title, or a statutory short form power of attorney properly executed in

accordance with the laws in effect at the time of its execution.

(a) Reasonable cause under this subdivision shall include, but not be

limited to:

(1) the refusal by the agent to provide an original power of attorney

or a copy certified by an attorney pursuant to section twenty-one

hundred five of the civil practice law and rules, or by a court or other

government entity;

(2) the third party's good faith referral of the principal and the

agent or a person acting for or with the agent to the local adult

protective services unit;

(3) actual knowledge of a report having been made by any person to the

local adult protective services unit alleging physical or financial

abuse, neglect, exploitation or abandonment of the principal by the

agent or a person acting for or with the agent;

(4) actual knowledge of the principal's death or a reasonable basis

for believing the principal has died;

(5) actual knowledge of the incapacity of the principal or a

reasonable basis for believing that the principal is incapacitated where

the power of attorney tendered is a nondurable power of attorney;

(6) actual knowledge or a reasonable basis for believing that the

principal was incapacitated at the time the power of attorney was

executed;

(7) actual knowledge or a reasonable basis for believing that the

power of attorney was procured through fraud, duress or undue influence;

(8) actual notice, pursuant to subdivision five of this section, of

the termination or revocation of the power of attorney;

(9) the refusal by a title insurance company to underwrite title

insurance for a gift of real property made pursuant to a statutory short

form power of attorney or non-statutory power of attorney that does not

contain express instructions or purposes of the principal with respect

to gifts in the modifications section of the statutory short form power

of attorney or in the non-statutory power of attorney; or

(10) the refusal of a request for a certification or an opinion of

counsel under paragraph (d) of subdivision one of this section.

(b) It shall be deemed unreasonable for a third party to refuse to

honor a statutory short form power of attorney properly executed in

accordance with section 5-1501B of this title or a statutory short form

power of attorney properly executed in accordance with the laws in

effect at the time of its execution, if the only reason for the refusal

is any of the following:

(1) the power of attorney is not on a form prescribed by the third

party to whom the power of attorney is presented.

(2) there has been a lapse of time since the execution of the power of

attorney.

(3) on the face of the statutory short form power of attorney, there

is a lapse of time between the date of acknowledgment of the signature

of the principal and the date of acknowledgment of the signature of any

agent.

3. (a) Not later than the tenth business day after presentation of an

original or attorney certified copy of a statutory short form power of

attorney properly executed in accordance with section 5-1501B of this

title or in accordance with the laws in effect at the time of its

execution to a third party for acceptance, such third party shall either

(a) honor the statutory short form power of attorney, or (b) reject the

statutory short form power of attorney in a writing that sets forth the

reasons for such rejection, which writing shall be sent to the principal

and the agent at the addresses on the power of attorney and such other

addresses as provided by the principal or the agent, or (c) request the

agent to execute an acknowledged affidavit pursuant to subdivision seven

of this section stating that the power of attorney is in full force and

effect if the statutory short form power of attorney was not submitted

for acceptance together with such an acknowledged affidavit. Such

reasons for rejection may include, but not be limited to non-conforming

form, missing or wrong signature, invalid notarization, or unacceptable

identification. In the event that the statutory short form power of

attorney presented is not an original or attorney certified copy, as

part of the initial rejection, such short form power of attorney may be

rejected for such reason, provided, however, in explaining the reason

for rejecting the short form power of attorney, the third party shall

also identify such other provisions of the short form power of attorney,

if any, that would otherwise constitute cause for rejection of the

statutory short form power of attorney. If the third party initially

rejects the statutory short form power of attorney in a writing that

sets forth the reasons for such rejection, the third party shall within

seven business days after receipt of a writing in response to the

reasons for such rejection (i) honor the statutory short form power of

attorney, or (ii) finally reject the statutory short form power of

attorney in a writing that sets forth the reasons for such rejection.

Such writing shall be sent to the address provided on the power of

attorney, to the address of the agent, if any, and may also be sent to

such other address as shall be provided on the account documents, or to

the address of the attorney as provided in an opinion of counsel

pursuant to this section. If the third party requests the agent to

execute such an acknowledged affidavit, the third party shall honor such

statutory short form power of attorney within seven business days after

receipt by the third party of an acknowledged affidavit which complies

with the provisions of subdivision seven of this section, stating that

the power of attorney is in full force and effect unless reasonable

cause exists as described in paragraph (a) of subdivision two of this

section. For the purposes of this subdivision, notice shall be

considered delivered at the time such notice is mailed and the time

requirements in which to honor or reject the statutory short form power

of attorney or request the agent to execute an acknowledged affidavit

shall not apply to the department of audit and control, a public

retirement system of the state as defined in subdivision six of section

one hundred fifty-two of the retirement and social security law, or the

department of health, including social services districts, in the

administration of the medical assistance "Medicaid" program pursuant to

title XIX of the federal social security act or other public health

insurance programs.

(b) Notice to the agent as required by paragraph (a) of this

subdivision shall not be sent until after a determination is made by

adult protective services if the reason for rejection is a reason set

forth in subdivision two of this section and is otherwise prohibited by

law or regulation.

4. (a) Once reasonably accepted, if a third party conducts a

transaction in reliance on a properly executed statutory short form

power of attorney, the third party shall be held harmless from liability

for the transaction.

(b) Except as provided in subdivision five of this section, it shall

be deemed unlawful for a third party to unreasonably refuse to honor a

properly executed statutory short form power of attorney executed in

accordance with section 5-1501B of this title or a statutory short form

power of attorney properly executed in accordance with the laws in

effect at the time of its execution. If a special proceeding as

authorized by section 5-1510 of this title is brought to compel the

third party to honor the statutory short form power of attorney, the

court may award damages, including reasonable attorney's fees and costs,

if the court finds that the third party acted unreasonably in refusing

to honor the agent's authority under the statutory short form power of

attorney. Such special proceeding shall be the exclusive remedy for a

violation of this section.

5. In the absence of actual knowledge that the principal lacked

capacity to execute a statutory short form power of attorney or that the

statutory short form power of attorney was procured through fraud,

duress or undue influence, no third party receiving and retaining a

statutory short form power of attorney properly executed in accordance

with section 5-1501B of this title, or a statutory short form power of

attorney properly executed in accordance with the laws in effect at the

time of its execution, or a complete photostatic copy of the properly

executed original thereof, nor any officer, agent, attorney-in-fact or

employee of such third party shall incur any liability by reason of

acting upon the authority thereof unless the third party shall have

received actual notice of the revocation or termination of such power of

attorney.

If a principal maintains an account at a financial institution, the

financial institution is deemed to have actual notice after it has had a

reasonable opportunity to act on a written notice of the revocation or

termination following its receipt of the same at its office where such

account is located.

6. If the application of the provisions of subdivision two or four of

this section shall be held invalid to any third party the application of

such provisions to any third party other than those to which it is held

invalid, shall not be affected thereby.

7. When the power of attorney is presented to a third party, it shall

not be deemed unreasonable for a third party to require the agent to

execute an acknowledged affidavit pursuant to this subdivision stating

that the power of attorney is in full force and effect. Such an

affidavit is conclusive proof to the third party relying on the power of

attorney that the power of attorney is valid and effective, and has not

been terminated, revoked or modified, except as to any third party who

had actual notice that the power of attorney had terminated, been

revoked or been modified prior to the execution of the affidavit. Such

affidavit shall state that:

(a) the agent does not have, at the time of the transaction, actual

notice of the termination or revocation of the power of attorney, or

notice of any facts indicating that the power of attorney has been

terminated or revoked;

(b) the agent does not have, at the time of the transaction, actual

notice that the power of attorney has been modified in any way that

would affect the ability of the agent to authorize or engage in the

transaction, or notice of any facts indicating that the power of

attorney has been so modified;

(c) if the agent was named as a successor agent, the prior agent is no

longer able or willing to serve; and

(d) if the agent has been the principal's spouse, the power of

attorney expressly provides that divorce or annulment as defined in

subparagraph two of paragraph (f) of section 5-1.4 of the estates,

powers and trusts law does not terminate the agent's authority

thereunder, or the agent does not have actual notice that the marriage

has been terminated by divorce or annulment as defined in subparagraph

two of paragraph (f) of section 5-1.4 of the estates, powers and trusts

law at the time of the transaction.

8. Nothing in this section shall require the acceptance of a form that

is not a statutory short form power of attorney.

9. A statutory short form power of attorney or a non-statutory power

of attorney that meets the requirements of subdivision one of section

5-1501B of this title shall be accepted for recording so long as it has

been signed by one agent named therein whose signature has been

acknowledged. If two or more agents acting on behalf of the principal

are required to act together, the power of attorney shall be accepted

for recording as long as their signatures have been acknowledged. When a

successor or co-agent authorized to act separately from any other agents

presents a certified copy of a recorded statutory short form power of

attorney or non-statutory power of attorney with the agent's signature

acknowledged, the instrument shall be accepted for recording.