Committee carries over bill to restore safe‑harbor for third parties relying on powers of attorney

The Senate Courts of Justice Committee carried over House Bill 929 after an extended discussion about a Court of Appeals decision that, the patron said, removed a safe‑harbor for third parties who rely in good faith on powers of attorney.

Delegate David Simon, the bill’s patron, said the Court of Appeals’ interpretation of the Virginia Uniform Power of Attorney Act left banks and title companies exposed to liability when a power of attorney had been altered or when a signature page from one document was attached to another. He described a fraud case in which a lender relied on a power of attorney and later faced unpaid obligations when the document’s validity was disputed. “If you give them this much liability without giving them an ability to say, ‘I relied on it without any actual knowledge,’ people would stop using it,” Simon said, arguing that the bill would restore the ability of third parties to rely on powers of attorney in good faith.

Matt Breeding of the Virginia Bankers Association urged alignment with the Uniform Law Commission model because neighboring states that adopted the model had not experienced the same issue. Business representatives and banking groups generally supported moving the bill forward to align Virginia’s statute with the model act and to reduce commercial friction in real‑estate and financial transactions.

Committee members noted the litigation posture — the case referenced is on appeal to the Supreme Court — and several members said the committee would await the high court’s decision; the committee moved to carry the bill over to see what the Supreme Court decides.

The committee did not vote to report the bill; sponsors and stakeholders said they would revisit statutory language after the pending appeal is resolved.