Amendments to Pennsylvania’s Law on Powers of Attorney

By Keri P. Ebeck, Attorney

Profile ImageOn July 2, 2014, Governor Tom Corbett signed into law as part of Act 95 of 2014, House Bill 1429, which provides for the amendments of Title 20 Chapter 56 (20 Pa. C.S. §§5601-5612). Title 20, Chapter 56 provides for the laws that govern all power of attorneys (hereinafter “POA”) used in financial and property transactions.

The amendments of Title 20 specifically change the law involving third party acceptance, reliance and civil liability of POA(s). This amendment was established to legislatively overturn a prior Pennsylvania Supreme Court case of Commonwealth v. Vine, 9 A. 3d 1150 (2010). The Vine case held that a third party is not reasonable to rely upon a power of attorney submitted by an agent where the POA may be defective or void, even in cases where the third party had no knowledge of such.[1]

The amendments of Title 20 were partially enacted to correct the Vine case decision by amending §5608 to state as follows:

5608(c) Genuineness.–A person who in good faith accepts a power of attorney without actual knowledge that a signature or mark of any of the following are not genuine may, without liability, rely upon the genuineness of the signature or mark of:

  1. The principal
  2. A person who signed the power of attorney on behalf of the principal and at the direction of the principal
  3. A witness
  4. A notary public or other person authorized by law to take acknowledgments[2]

By this amendment, a third party may accept in good faith (without specific knowledge) the POA that an agent submits without consequences and civil liability. Additionally, the amendments went on to state in §5608(d) that “A person who in good faith accepts a power of attorney without actual knowledge of any of the following may, without liability, rely upon the power of attorney as if the power of attorney and agent’s authority were genuine, valid and still in effect…”[3] This amendment specifically changed the law in PA, as previously a rejection or refusal of a POA may have resulted in civil liability.  The POA law now states that “A person who is asked to accept a power of attorney may request and, without liability, rely upon without further investigation…(1) an agent’s certification under penalty of perjury; (2) an English translation of the POA; (3) an opinion of counsel as to the POA.”[4]

These amendments to Title 20 directly affect all banks and their employees, who accept POA(s) for their customers on a daily basis to conduct business. The amendments allow for a greater protection from liability for accepting the POA(s) in question. The legislation of Act 95 of 2014 also incorporates the standing Pennsylvania law as part of the Uniform Power of Attorney Act, which is effective and law in fifteen (15) other states.[5]  Should a lender or third party have a question on a particular POA, it is recommended to contact legal counsel for interpretation of the current standing law and amendments recently enacted.

The amendments of Title 20, Section 56; §§ 5601(f), 5608, 5608.1, 5808.2, 5611 and 5611 are effective as of July 2, 2014. All other parts of Act 95 of 2014 are effective as of January 1, 2015.

If you have any questions on this matter, please contact Ms. Keri P. Ebeck, Esq. Keri is an attorney who practices in bankruptcy and is based in the Pittsburgh office. She can be reached at 412.338.7102 and kebeck@weltman.com.

[1] Commonwealth v. Vine, 9 A. 3d 1150 (2010)
[2] House Bill 1429 (Act 95 of 2014) http://www.legis.state.pa.gov
[3] Id.
[4] Id.
[5] Important Changes Enacted to Pennsylvania’s Power of Attorney Law, Pepe, Raymond, June 26, 2014; http://www.klgates.com/…/Important_Changes_to_Pennsylvania’s_Power_of_ Attorney_Law_Take_Effect_Jan2015

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