Do I Need a Power of Attorney?

Here in Kelowna there are several reasons an individual may require a Power of Attorney (POA) when preparing to sell his or her property. A Power of Attorney is a legal documents that grants to a person (sometimes called the “Attorney”) the right to sell and dispose of the assets of the Donor (the person granting the power of attorney). Although there are many circumstances where a Power of Attorney can be useful, some of the most common situations are:

  1. families where spouses are working overseas/ out of town (including military duty)
  2. adult caregivers of elderly persons needing to manage their everyday financial and property affairs
  3. real estate agents who act under the terms of a specific and limited Power of Attorney to complete a real estate deal (for example when their clients are on vacation)

When the time comes to transfer land using a POA, a lawyer is going to be looking for certain criteria in order to establish the validity of the POA.

  1. ascertaining the true identity of the parties involved;
  2. make inquiries to ensure the POA has not been revoked;
  3. ensuring that the ORIGINAL must be filed with the Land Title Office with a DF#;
  4. ensuring that the POA was properly witnessed by an OFFICER under s.42(3) of the Land Title Act;
  5. ensuring the POA has sufficient powers to transfer land; and,
  6. ensuring that the attorney must be at least 19 yrs old.

The flexibility of allowing another person to make financial and legal decisions for someone else can make Power of Attorney a useful tool in real estate transactions. Contact lawyers@pihl.ca to find out more.

Discharging your Mortgage

For sellers the essential bargain in a real estate transaction is “I give you my house, free an clear, and you give me money”…

The “free and clear” part is key, it means that the Seller is giving the Buyer title free and clear of all financial encumbrances on title. A financial encumbrance includes things like your mortgage or a secured line of credit. When the mortgage is held by the bank the discharge is relatively straight forward: your lawyer requests a payout statement from the bank and on the closing date pays the money to the bank on their promise to discharge the mortgage.

When the mortgage is not held by the bank, things get a little more complicated. For example, if Uncle Buck loaned you 200k for your home and registered a mortgage, your lawyer would have to have a registered discharge “in hand” on closing and this creates a “catch-22” with the Buyer (who won’t part with the cash until he gets assurance of title). This problem is usually solved in British Columbia by the exchange of lawyers undertakings (court enforceable promises) with the lawyer holding all documents in “escrow” until everything is ready to go.