Bulletin: GA2011003

Dear Associates:    

This Bulletin addresses requirements for insuring instruments executed by a corporation conveying or mortgaging an interest in real property.  This bulletin should be read in conjunction with other National and Georgia Bulletins relating to the proper authority, execution and attestation of security deeds and other instruments affecting title.

A corporation has legal capacity to hold and deal in real property in Georgia upon incorporation as long as the corporation remains in good standing. O.C.G.A. §14-2-302. This rule applies whether the corporation is chartered in Georgia or in other states. Where a corporation is executing any instrument conveying an interest in real property, Georgia law requires that the instrument must be executed in the name of the corporation by its duly authorized officers or agent.  Historically, a corporate seal affixed to such an instrument is conclusive evidence that the officer has the necessary authority to execute the instrument on behalf of the corporation.  Where there is no corporate seal, Georgia law requires that a deed of conveyance or mortgage be executed by the president or vice-president and that the signature be attested or countersigned by the secretary, assistant secretary, cashier or assistant cashier of the corporation in order to establish the necessary evidence of authority.  O.C.G.A. §14-5-7(a) as amended effective July 1, 2011.  In addition, any release or transfer of an interest in a security deed, mortgage or other security instrument executed by a corporation without a corporate seal must be signed by the president, vice-president, secretary or assistant secretary to establish the necessary evidence of corporate authority.  O.C.G.A. §14-5-7(b) as amended effective July 1, 2011.  Although the statute provides that a corporation may alter these statutory requirements by corporate resolution, any resolution must specifically authorize the execution of such instruments by a single officer or other officers of the corporation.  A copy of the resolution must be attached as an exhibit to the corporate deed of conveyance or release and assignment of security agreement filed for record and the resolution must be referenced on the face of the instrument.

           A corporation may convey through a power of attorney only upon a resolution of the board of directors that specifically gives an officer or agent the authority to execute a power of attorney.  Otherwise, the corporation's governing documents must specifically grant this authority.  Issuing Offices should carefully examine the necessary documents to ensure that proper authority exists before accepting any power of attorney from a corporation.

Company Policy: Regardless of how any corporate deed of conveyance, mortgage, release or transfer of security agreement  is prepared or where the instrument is sent to be executed, all Georgia Issuing Offices must examine the signature page of any corporate instrument to ensure that it contains one of the following before the instrument is filed for record with the Clerk of Court and insured:

A.        Corporate Deeds of Conveyance and Mortgages.  

1.    The corporate seal must be affixed to any corporate deed of conveyance, security deed or mortgage where only one officer of the corporation executes the instrument. Where there is no corporate seal, Issuing Offices must verify that a proper resolution from the corporate board of directors authorizing the execution of such instruments by this sole officer is attached as an exhibit to the instrument filed for record and referenced on the face of the instrument.

2.    Where there is no corporate seal, the corporate president or vice-president must execute the deed of conveyance or mortgage and that signature must be attested to or countersigned by the secretary, assistant secretary, cashier or assistant cashier of the corporation.  If the deed is executed by a corporate officer other than the president or vice president or without the proper countersignature of the secretary, Issuing Offices must verify that a proper corporate resolution authorizing the other officer to execute the particular instrument is attached as an exhibit to the instrument filed for record and referenced on the face of the instrument.

B.         Corporate Releases and Assignments.

1.    The corporate seal must be affixed to any corporate release or assignment where only one officer of the corporation executes the instrument. Where there is no corporate seal, Issuing Offices must verify that a proper resolution from the board of directors authorizing the execution of such instruments by this sole officer is attached as an exhibit to the instrument filed for record and referenced on the face of the instrument.

2.    Where there is no corporate seal, the corporate president, vice-president, secretary or assistant secretary must execute the release or assignment.  If the release or assignment is executed by another corporate officer, Issuing Offices must verify that a proper corporate resolution authorizing the other officer to execute release or assignment is attached as an exhibit to the instrument filed for record and referenced on the face of the instrument. 

C.         Power of Attorney.

            Issuing Offices must confirm that any power of attorney from a corporation is properly authorized either by the formation documents or by proper authorization from the entity in the form of a resolution.  Please consult your local underwriting personnel if there is any question as to whether this authority exists or not.

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.

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