Introduction
A Power of Attorney (PoA) is a very significant legal instrument under which one person (the principal) may grant authority to another (the agent or attorney-in-fact) to transact other’s properties. In any case of purchasing, selling or administering property, PoA can make all these easier especially if the principal is out of reach, incapacitated or for some other reason. But here we see that the validity and the extent of a PoA determines how influential it can be in property transfers. This article discusses the impact of PoA on property deals, different types of PoA, and issues of law.
Legal advice should be sought whenever preparing and signing a PoA to make sure of its compliance with the legislation.
Power of Attorney for property transactions
Power of Attorney is a legal instrument, which allows an agent to carry out specific acts of power that are connected with property transactions. According to the type of the transaction the PoA may provide the agent with general and or special powers of attorney.
Key functions of power of attorney in property transactions
When it comes to conveyancing the agent and or attorney can draft the sale agreement, search the title of the property and attend to any other legal issues. In the current sale of property the agent is allowed to sign the sale deed, transfer the ownership of the property and even make sure that all the legal procedures have been met.
Seeking advice from a property lawyer is very important for legal advice as to the provisions to be inserted in the PoA for such transactions. In property management, possible tasks for the agent to perform may include but are not limited to finding tenants, collecting rents on behalf of the owner, paying property taxes, and keeping records.
Category of Power of Attorney pertaining to property affairs
In Power of Attorney, their power of attorney for a specific property transaction may be granted full or partial power depending on the type of property transaction. These are General Power of Attorney (GPA) and Special Power of Attorney (SPA).
General Power of Attorney (GPA)
A General Power of Attorney is a general authority where an agent/attorney-in-fact has general power to act for the principal across a very wide range of property dealings. This ranges from acquiring, disposing, lettable, and otherwise dealing with a piece of real estate. GPA is not rigid but might attract legal challenges occasioned by provision of GPA in contracts involving the sale or lease of property, particularly immovable property. Sometimes, there is a necessity for the registration of GPA in order to make it lawful and enforceable.
Special Power of Attorney (SPA)
A Special Power of Attorney is exercised for particular transactions or for a single instance such as sale of a particular piece of property. This offers more control over the amount of delegation authority that is given to an agent. In all jurisdictions, SPA is commonly recorded and may well have specific formalities connected with it.
Durable Power of Attorney (DPA)
A Durable Power of Attorney does not terminate when the principal is not capable of making decisions for him or herself. It is mostly applied in management of real estate or in business that the principal may not be around for a long time. Consulting a lawyer is crucial since it makes the DPA enforceable and its implementation proper.
Sub power of attorney in Property Purchase
In reference to the property purchase, the agent who conducts the purchase on behalf of the buyer can contribute greatly towards easing the process. An attorney in fact can negotiate price, draw up and sign the purchase agreement for the buyer and other related documents.
Key Steps in buying property with POA
This is segregally signed by the attorney to enable the sale to go on as planned and the title deed as well as other documents. The attorney can also perform searches such as searching for the legal title to the property, ownership amongst others in order to establish any encumbrances. The attorney also plays the role of making payment and seeing to it that the transaction is done to the agreed upon standards.
Legal considerations in buying property
The PoA has to be validly signed and often can be done so only with the official registration. As for now, an unregistered GPA can still be set aside in court especially in immovable property dealings. The buyer must make sure that the PoA provides that agent with sufficient authority to effect the purchase.
Selling property through power of attorney
In situations where the owner of the property cannot sell this property on their own then they are allowed to transfer Power of Attorney to another person in order to sell the property on behalf of the owner. This often happens when the principal cannot carry out his/her duties due to one reason or the other.
Key Functions
The attorney is also able to append his signature to the sale deed and other documents relating to the transaction. The attorney also pays the taxes, registration fees as well as observing the laws regulating properties in the particular area. After a sale has been agreed on then, the attorney arranges and oversees the actual transfer of legal title of the property.
Legal Considerations in selling property
It is recommended that the Special Power of Attorney (SPA) specifies the range of the agent’s power to dispose of the property. If the certain authority is not well defined or where it covers a large area of activity then the transaction could be void. In the sale of immovable property, it is normally required that the PoA is registered in order to make it valid.
Power of Attorney in property management
Leasing and taxes, maintenance and tenants fall under the scope of managing property and require personal attention. A PoA can for instance give the agent powers to perform these tasks on the behalf of the property owner.
Key functions in property management
The attorney can let out the property to the occupant and enter into tenancy agreements and deal with security deposits. Outsourced attorney is also allowed to pay property taxes, utility bills and make sure that the property is well maintained. Moreover, the attorney can deal with repair and maintenance; one may hire contractors as well as oversee the management of the property.
Legal considerations in property management
In the PoA, it should be crystal clear which particular functions related to property management the agent is allowed to carry out. This conclusion is valid in the belief that unfixed or generalised authority may give rise to controversy. If the PoA is for a limited duration, the principal recipient should obtain findings for the revocation of the PoA when it is necessary. Moreover, the monitor has to supervise the agent to make sure he or she operates on the principal’s behalf.
Risks and legal issues in conveyancing for Power of Attorney transactions
As mentioned above, PoA has positive effects in conveying property, but there are a number of drawbacks connected with its application.
Fraudulent transactions
An agent might exploit the PoA to sell or lease property contrary to the principal’s wish without his consent.
Disputes over authority
One is likely to encounter problems of jurisdiction contests or other issues of legal controversy during trial.
PoA revocation
The PoA given to the principal’s proxy automatically loses its validity if the principal withdraws the proxy at any time. This is especially so where the revocation of the attorney’s authority is not properly communicated; transactions entered into by the attorney prior to a revocation may be challenged.
Conclusion
The Power of Attorney is especially useful for the buying, selling and management of property. Indeed, it affords flexibility, particularly to principals who may be in a position not to attend the meeting physically. However, there are certain issues that should be complied with in executing the PoA, appropriately register the PoA, and the power of agent as must be well defined to to have a room for legal battle.
When dealing with property transactions it is paramount that a PoA has to be clear, specific, and registered; the authority of the agent to complete the intended transaction; and it is advisable to seek legal advice to avoid cases of using the PoA for improper conduct.
Before going into transaction it is advisable to seek advice from a property lawyer so as to ensure that the PoA drafted is legal and in the best interest of the appointor.
FAQs
Is it possible for the Power of Attorney to sign a property purchase?
Yes, a PoA is effective in signing agreements, making payments and in fact completing the property transaction on behalf of the covered individual.
Would a Power of Attorney sufficient for Dwelling?
Yes, but the PoA should provide an unclear authority to sell the property, tend to use the Special Power of Attorney (SPA) and register for immovable property.
What are the impacts of revocation of Power of Attorney?
The cancellation of a PoA negates the capacity of the agent to transact. That means that any activity performed by the agent prior to revocation is still legal unless it is challenged.
Can a PoA agent sell property?
Yes, a PoA agent has powers to lease out a property provided he/ she was given the authority by the owner. It will be important to make sure that the PoA fully defines powers of management of properties and assets.
Is seeking the service of a lawyer necessary for property transactions with PoA?
Before executing the PoA it is wise to seek legal advice to ascertain its efficacy, legal compliance, and relevance to the transaction.
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