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Confirming Authority to Sign: Why the RCSD Is Vital
By Barbara Pronin
It stands to reason that the valid record owner of a property is the only person who has the right to list it, sell it, and sign a purchase agreement. But what happens when the valid owner/seller is a trust, business or corporate entity? In California, proof is required that the person representing the entity is authorized to act on the entity’s behalf.

The Representative Capacity Signature Disclosure, commonly known as the RCSD, is the form provided to the escrow/title company to confirm that the person signing the purchase agreement indeed has valid “representative capacity” and is authorized to act and sign on behalf of the entity.

What establishes acceptable “representative capacity”?
  • Trust– The Trust Agreement itself, or a Certification of Trust, stating who is the current trustee and listing the trustee’s powers, which should include the purchase/sale of real property
  • Limited Liability Company – An Operating Agreement or Certificate of Members (or Managers) designating that the member or manager is authorized to conduct business on behalf of the LLC
  • Power of Attorney – Written authorization to make decisions and act on another’s behalf in business and/or legal affairs
  • Partnership – A Partnership Agreement designating either the managing partner or the general partner and a certificate of partners authorizing the transaction 
What documents does the agent need to provide?
  • LLC documentation showing who is authorized to make decisions regarding the purchase/sale of the LLC’s real estate and/or other assets
  • Trust Agreement and/or Certification of Trust
  • Original or copy of recorded Power of Attorney, specific to the property being sold or purchased
  • Partnership Agreement showing who is authorized to make decisions regarding the purchase/sale of the partnership’s real estate and/or other assets 
The RCSD should be submitted to the escrow company by the agent along with the purchase agreement. The important thing to remember is that, without the RCSD, the contract may not be valid.

While this information offers a general outline of what is needed in these cases, we understand that every deal is unique. As your escrow partner, and as a leader in escrow strategies, we stand ready to answer your questions and provide the support you need in your mission to ensure a seamless transaction for all your buyers and sellers

Barbara Pronin is an award-winning writer based in Orange County, Calif. A former news editor with more than 30 years of experience in journalism and corporate communications, she has specialized in real estate topics for over a decade.

This material is not intended to be relied upon as a statement of the law, and is not to be construed as legal, tax or investment advice.  You are encouraged to consult your legal, tax or investment professional for specific advice.  The material is meant for general illustration and/or informational purposes only.  Although the information has been gathered from sources believed to be reliable, no representation is made as to its accuracy. 

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