§ 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\nstatutory short form power of attorney. 1. (a) For purposes of this\nsection, "acknowledged" means purportedly verified before a notary\npublic or other individual authorized to take acknowledgements. For\npurposes of this section, "witnessed" means purportedly witnessed by two\npersons who are not named in the instrument as agents or as permissible\nrecipients of gifts.\n (b) A person that in good faith accepts an acknowledged and witnessed\npower of attorney without actual knowledge that the signature is not\ngenuine may rely upon the presumption that the signature is genuine.\n (c) A person that in good faith accepts an acknowledged and witnessed\npower of attorney without actual knowledge that the power of attorney is\nvoid, invalid, or terminated, that the purported agent's authority is\nvoid, invalid, or terminated, or that the agent is exceeding or\nimproperly exercising the agent's authority may rely upon the power of\nattorney as if the power of attorney were genuine, valid and still in\neffect, the agent's authority were genuine, valid and still in effect,\nand the agent had not exceeded and had properly exercised the authority.\n (d) A person that is asked to accept an acknowledged and witnessed\npower of attorney may request, and rely upon, without further\ninvestigation:\n (1) an agent's certification under penalty of perjury of any factual\nmatter concerning the principal, agent or power of attorney; and\n (2) an opinion of counsel as to any matter of law concerning the power\nof attorney if the person making the request provides in a writing or\nother record the reason for the request.\n (e) An opinion of counsel requested under this section must be\nprovided at the principal's expense unless the request is made more than\nten business days after the power of attorney is presented for\nacceptance.\n (f) For purposes of this section, a person that conducts activities\nthrough employees is without actual knowledge of a fact relating to a\npower of attorney, a principal, or an agent if the employee conducting\nthe transaction involving the power of attorney is without actual\nknowledge of the fact after making reasonable inquiry with respect\nthereto.\n 2. No third party located or doing business in this state shall\nrefuse, without reasonable cause, to honor a statutory short form power\nof attorney properly executed in accordance with section 5-1501B of this\ntitle, or a statutory short form power of attorney properly executed in\naccordance with the laws in effect at the time of its execution.\n (a) Reasonable cause under this subdivision shall include, but not be\nlimited to:\n (1) the refusal by the agent to provide an original power of attorney\nor a copy certified by an attorney pursuant to section twenty-one\nhundred five of the civil practice law and rules, or by a court or other\ngovernment entity;\n (2) the third party's good faith referral of the principal and the\nagent or a person acting for or with the agent to the local adult\nprotective services unit;\n (3) actual knowledge of a report having been made by any person to the\nlocal adult protective services unit alleging physical or financial\nabuse, neglect, exploitation or abandonment of the principal by the\nagent or a person acting for or with the agent;\n (4) actual knowledge of the principal's death or a reasonable basis\nfor believing the principal has died;\n (5) actual knowledge of the incapacity of the principal or a\nreasonable basis for believing that the principal is incapacitated where\nthe power of attorney tendered is a nondurable power of attorney;\n (6) actual knowledge or a reasonable basis for believing that the\nprincipal was incapacitated at the time the power of attorney was\nexecuted;\n (7) actual knowledge or a reasonable basis for believing that the\npower of attorney was procured through fraud, duress or undue influence;\n (8) actual notice, pursuant to subdivision five of this section, of\nthe termination or revocation of the power of attorney;\n (9) the refusal by a title insurance company to underwrite title\ninsurance for a gift of real property made pursuant to a statutory short\nform power of attorney or non-statutory power of attorney that does not\ncontain express instructions or purposes of the principal with respect\nto gifts in the modifications section of the statutory short form power\nof attorney or in the non-statutory power of attorney; or\n (10) the refusal of a request for a certification or an opinion of\ncounsel under paragraph (d) of subdivision one of this section.\n (b) It shall be deemed unreasonable for a third party to refuse to\nhonor a statutory short form power of attorney properly executed in\naccordance with section 5-1501B of this title or a statutory short form\npower of attorney properly executed in accordance with the laws in\neffect at the time of its execution, if the only reason for the refusal\nis any of the following:\n (1) the power of attorney is not on a form prescribed by the third\nparty to whom the power of attorney is presented.\n (2) there has been a lapse of time since the execution of the power of\nattorney.\n (3) on the face of the statutory short form power of attorney, there\nis a lapse of time between the date of acknowledgment of the signature\nof the principal and the date of acknowledgment of the signature of any\nagent.\n 3. (a) Not later than the tenth business day after presentation of an\noriginal or attorney certified copy of a statutory short form power of\nattorney properly executed in accordance with section 5-1501B of this\ntitle or in accordance with the laws in effect at the time of its\nexecution to a third party for acceptance, such third party shall either\n(a) honor the statutory short form power of attorney, or (b) reject the\nstatutory short form power of attorney in a writing that sets forth the\nreasons for such rejection, which writing shall be sent to the principal\nand the agent at the addresses on the power of attorney and such other\naddresses as provided by the principal or the agent, or (c) request the\nagent to execute an acknowledged affidavit pursuant to subdivision seven\nof this section stating that the power of attorney is in full force and\neffect if the statutory short form power of attorney was not submitted\nfor acceptance together with such an acknowledged affidavit. Such\nreasons for rejection may include, but not be limited to non-conforming\nform, missing or wrong signature, invalid notarization, or unacceptable\nidentification. In the event that the statutory short form power of\nattorney presented is not an original or attorney certified copy, as\npart of the initial rejection, such short form power of attorney may be\nrejected for such reason, provided, however, in explaining the reason\nfor rejecting the short form power of attorney, the third party shall\nalso identify such other provisions of the short form power of attorney,\nif any, that would otherwise constitute cause for rejection of the\nstatutory short form power of attorney. If the third party initially\nrejects the statutory short form power of attorney in a writing that\nsets forth the reasons for such rejection, the third party shall within\nseven business days after receipt of a writing in response to the\nreasons for such rejection (i) honor the statutory short form power of\nattorney, or (ii) finally reject the statutory short form power of\nattorney in a writing that sets forth the reasons for such rejection.\nSuch writing shall be sent to the address provided on the power of\nattorney, to the address of the agent, if any, and may also be sent to\nsuch other address as shall be provided on the account documents, or to\nthe address of the attorney as provided in an opinion of counsel\npursuant to this section. If the third party requests the agent to\nexecute such an acknowledged affidavit, the third party shall honor such\nstatutory short form power of attorney within seven business days after\nreceipt by the third party of an acknowledged affidavit which complies\nwith the provisions of subdivision seven of this section, stating that\nthe power of attorney is in full force and effect unless reasonable\ncause exists as described in paragraph (a) of subdivision two of this\nsection. For the purposes of this subdivision, notice shall be\nconsidered delivered at the time such notice is mailed and the time\nrequirements in which to honor or reject the statutory short form power\nof attorney or request the agent to execute an acknowledged affidavit\nshall not apply to the department of audit and control, a public\nretirement system of the state as defined in subdivision six of section\none hundred fifty-two of the retirement and social security law, or the\ndepartment of health, including social services districts, in the\nadministration of the medical assistance "Medicaid" program pursuant to\ntitle XIX of the federal social security act or other public health\ninsurance programs.\n (b) Notice to the agent as required by paragraph (a) of this\nsubdivision shall not be sent until after a determination is made by\nadult protective services if the reason for rejection is a reason set\nforth in subdivision two of this section and is otherwise prohibited by\nlaw or regulation.\n 4. (a) Once reasonably accepted, if a third party conducts a\ntransaction in reliance on a properly executed statutory short form\npower of attorney, the third party shall be held harmless from liability\nfor the transaction.\n (b) Except as provided in subdivision five of this section, it shall\nbe deemed unlawful for a third party to unreasonably refuse to honor a\nproperly executed statutory short form power of attorney executed in\naccordance with section 5-1501B of this title or a statutory short form\npower of attorney properly executed in accordance with the laws in\neffect at the time of its execution. If a special proceeding as\nauthorized by section 5-1510 of this title is brought to compel the\nthird party to honor the statutory short form power of attorney, the\ncourt may award damages, including reasonable attorney's fees and costs,\nif the court finds that the third party acted unreasonably in refusing\nto honor the agent's authority under the statutory short form power of\nattorney. Such special proceeding shall be the exclusive remedy for a\nviolation of this section.\n 5. In the absence of actual knowledge that the principal lacked\ncapacity to execute a statutory short form power of attorney or that the\nstatutory short form power of attorney was procured through fraud,\nduress or undue influence, no third party receiving and retaining a\nstatutory short form power of attorney properly executed in accordance\nwith section 5-1501B of this title, or a statutory short form power of\nattorney properly executed in accordance with the laws in effect at the\ntime of its execution, or a complete photostatic copy of the properly\nexecuted original thereof, nor any officer, agent, attorney-in-fact or\nemployee of such third party shall incur any liability by reason of\nacting upon the authority thereof unless the third party shall have\nreceived actual notice of the revocation or termination of such power of\nattorney.\n If a principal maintains an account at a financial institution, the\nfinancial institution is deemed to have actual notice after it has had a\nreasonable opportunity to act on a written notice of the revocation or\ntermination following its receipt of the same at its office where such\naccount is located.\n 6. If the application of the provisions of subdivision two or four of\nthis section shall be held invalid to any third party the application of\nsuch provisions to any third party other than those to which it is held\ninvalid, shall not be affected thereby.\n 7. When the power of attorney is presented to a third party, it shall\nnot be deemed unreasonable for a third party to require the agent to\nexecute an acknowledged affidavit pursuant to this subdivision stating\nthat the power of attorney is in full force and effect. Such an\naffidavit is conclusive proof to the third party relying on the power of\nattorney that the power of attorney is valid and effective, and has not\nbeen terminated, revoked or modified, except as to any third party who\nhad actual notice that the power of attorney had terminated, been\nrevoked or been modified prior to the execution of the affidavit. Such\naffidavit shall state that:\n (a) the agent does not have, at the time of the transaction, actual\nnotice of the termination or revocation of the power of attorney, or\nnotice of any facts indicating that the power of attorney has been\nterminated or revoked;\n (b) the agent does not have, at the time of the transaction, actual\nnotice that the power of attorney has been modified in any way that\nwould affect the ability of the agent to authorize or engage in the\ntransaction, or notice of any facts indicating that the power of\nattorney has been so modified;\n (c) if the agent was named as a successor agent, the prior agent is no\nlonger able or willing to serve; and\n (d) if the agent has been the principal's spouse, the power of\nattorney expressly provides that divorce or annulment as defined in\nsubparagraph two of paragraph (f) of section 5-1.4 of the estates,\npowers and trusts law does not terminate the agent's authority\nthereunder, or the agent does not have actual notice that the marriage\nhas been terminated by divorce or annulment as defined in subparagraph\ntwo of paragraph (f) of section 5-1.4 of the estates, powers and trusts\nlaw at the time of the transaction.\n 8. Nothing in this section shall require the acceptance of a form that\nis not a statutory short form power of attorney.\n 9. A statutory short form power of attorney or a non-statutory power\nof attorney that meets the requirements of subdivision one of section\n5-1501B of this title shall be accepted for recording so long as it has\nbeen signed by one agent named therein whose signature has been\nacknowledged. If two or more agents acting on behalf of the principal\nare required to act together, the power of attorney shall be accepted\nfor recording as long as their signatures have been acknowledged. When a\nsuccessor or co-agent authorized to act separately from any other agents\npresents a certified copy of a recorded statutory short form power of\nattorney or non-statutory power of attorney with the agent's signature\nacknowledged, the instrument shall be accepted for recording.\n