Recording Your Power of Attorney When Buying Subject-To
Recording Your Power of Attorney When Buying Subject-To
When buying subto, you’re likely getting a limited power of attorney from the seller/borrower. It’s almost always best to record the POA at closing.
Why You Should Record the POA
Future Title Insurance May Depend on It
Most title companies will not issue title insurance for a transaction where a transfer document was signed by a POA unless the POA was recorded and explicitly allows self-dealing.
Protects Your Right to Act
A recorded POA is part of the public chain of title, demonstrating your ability to manage, refinance, sell, or litigate property rights.
Secures the Transaction Against Challenge
Recording signals to courts, lenders, and third parties that your authority was planned and properly granted, limiting or outright preventing future disputes.
In subject-to deals, where the seller retains legal liability for the mortgage, recorded evidence of your authority matters.
Preserves Authority in Emergencies
If the seller disappears, becomes incapacitated, or dies, a recorded POA ensures you can still act—even if no one else can.
May Be Required for Recording Other Documents
County recorders may require the POA to be recorded (or submitted concurrently) when it's cited in a deed, lien release, or similar document.
What if You’re Scared to Record It?
Perceived Risks of Recording — and Why They’re Usually Overblown
📉 Risks vs Reality
Triggers lender scrutiny
Recording a POA doesn’t trigger lender scrutiny. In practice, lenders don't monitor land records too regularly. Further, a recorded POA wouldn’t be the document that alerts them to the transfer; the deed would. So risk exists, but is not unique to the POA—it’s already present in any subject-to deal. A POA is not a violation of the due on sale clause.
Creates public evidence of self-dealing
True—but this is precisely what protects you. If challenged, the POA proves the seller knew and agreed to your authority.
When You Might Wait to Record
The POA is backup-only; seller is still active and cooperative.
You're not using it to sign anything that will be recorded.
In these cases, you should still record before using the POA to sign anything for recording—and ideally while the seller is still reachable for backup signatures if needed.
Bottom Line
📌 An unrecorded POA is not invalid, but it’s better to have one recorded before there’s any contest than after. Record the POA.
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