The Foundation: What Is Authority in a Real Estate Sale? When a Louisiana property changes hands, most buyers and sellers focus on price, inspections, and closing costs. But one of the most critical—and overlooked—questions in any real estate transaction is deceptively simple: Does the person signing the deed actually have the legal authority to sell? Authority in real estate transactions refers to the legal power a person has to act on behalf of another party—whether that party is an individual, a business entity, or an estate. In Louisiana, understanding how authority is established, documented, and verified is essential for any buyer, seller, or real estate professional involved in a transaction.

How Authority Is Established for Sales Involving Corporations, LLCs, Powers of Attorney, and Trusts. Authority can take many forms depending on who owns the property. When the seller is a corporation, authority typically flows from the entity's articles of incorporation, bylaws, and a corporate resolution authorizing the sale—meaning someone must verify that the signing officer has been specifically empowered to execute the transaction. For a Louisiana LLC, the operating agreement governs who can act on the company's behalf; in a member-managed LLC, all members may need to sign, while a manager-managed LLC grants authority to the designated manager. When a property owner is incapacitated or otherwise unavailable, a power of attorney (POA) may authorize another person—called the agent or attorney-in-fact—to sign on their behalf. Louisiana law requires that a POA used in a real estate sale be in authentic form a/k/a an authentic act (executed before a notary and two witnesses) or via an act under private signature duly acknowledged (signed not before a notary but attested to signature in front of notary and two witnesses.) Trustees acting on behalf of a trust must have authority under the trust instrument, and succession representatives must obtain proper court authority before conveying estate property.

The Consequences of an Unauthorized Sale in Louisiana. The consequences of an unauthorized sale in Louisiana can be severe. Under Louisiana Civil Code Article 2021 and related provisions, a contract made without proper authority is generally null and unenforceable - meaning the purported buyer may receive no valid title at all. Even if the sale is recorded in the public records, a title defect from lack of authority can surface years later, potentially exposing the buyer, their lender, and subsequent owners to costly litigation. This is why Louisiana title attorneys and title insurance companies carefully examine corporate resolutions, LLC operating agreements, certified copies of powers of attorney, and court orders before allowing a closing to proceed. If you are purchasing property in Louisiana - or selling on behalf of an entity or another individual - working with an experienced real estate attorney to verify proper authority is not just advisable, it is essential to protecting your investment and ensuring a clean, marketable title.

To learn more or to schedule a consultation, contact Joseph R. Marriott at joseph@snw.law or by telephone at (504)324-1886.