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:
- families where spouses are working overseas/ out of town (including military duty)
- adult caregivers of elderly persons needing to manage their everyday financial and property affairs
- 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.
- ascertaining the true identity of the parties involved;
- make inquiries to ensure the POA has not been revoked;
- ensuring that the ORIGINAL must be filed with the Land Title Office with a DF#;
- ensuring that the POA was properly witnessed by an OFFICER under s.42(3) of the Land Title Act;
- ensuring the POA has sufficient powers to transfer land; and,
- 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 email@example.com to find out more.
A Power of Attorney (POA) allows another person to make financial and legal decisions for someone else. In the context of residential real estate, these documents can be very helpful in the many situations, including:
- a Buyer or Seller is on active military duty overseas;
- a Seller is on vacation or otherwise not in Canada at closing;
- a Seller works in northern Canada and does not have regular access to a lawyer;
- a Seller is elderly or disabled and is unable to deal with his or her affairs;
IMPORTANT NOTE: For Buyers, the use of a Power of Attorney is strictly limited by many Mortgagees (Banks) and often they must pre-approve of the use of a POA before subjects are a removed on a deal where the Buyer is signing by POA.
A new Power of Attorney Act came into effect in BC on September 1, 2011. Although it did not invalidate older Powers of Attorney, new rules were brought into force. When faced with a power of attorney here are some questions should a Realtor ask (ideally upon listing If you know you have a POA)?
- Is the Donor (person granting the POA) ALIVE and NOT BANKRUPT?
- Has the ORIGINAL Power of Attorney been given to my client’s lawyer for filing in the Land Title Office?
- Has this Power of Attorney been reviewed with my client’s lawyer to ensure it is effective to transfer real estate and is it compliant with the Land Title Act?
- Am I aware of any action by the Donor or Attorney which would void or terminate the Power of Attorney?
- Are ALL signatures on the Power of Attorney document witnessed by a lawyer/ notary?
- Do the NAMES on the Power of Attorney match EXACTLY the names on the Title (in the case of Sellers) or the names on the Contract (in the case of Buyers)?
- If the Seller is incapacitated and the sale is to occur by POA, does the Power of Attorney “continue when incapacitated”?
- In order to guard against fraud, do I “know the property” and do I “know my client”?
Written by Kelowna Real Estate Lawyer Peter Borszcz.
In Kelowna, it is common place that real estate closings occur with another party signing on behalf of the Seller and executing documents by a power of attorney. A power of attorney is a document whereby one person (the DONOR) confers authority on another person (the ATTORNEY) to take certain actions on their behalf.
A power of attorney can be LIMITED in scope. For example it can only allow a person to deal with banking affairs and it may specifically exclude the right to deal with real estate. There are specific limitations on powers of attorney with respect to real estate, for example, s.27 of the Property Law Act prohibits an ATTORNEY from selling land to himself and s.56 of the Land Title states that a filed Power of Attorney will (unless expressly excluded) expire 3 years after the date it was signed.
To be valid to transfer land, a lawyer is looking for a number of items including:
a)ascertaining the true identity of the parties involved;
b)make inquiries to ensure the POA has not been revoked;
c)ensuring that the ORIGINAL must be filed with the Land Title Office with a DF#;
d)ensuring that the POA was properly witnessed by an OFFICER under s.42(3) of the Land Title Act;
e) ensuring the POA has sufficient powers to transfer land; and,
f)ensuring that the attorney must be at least 19 yrs old.
a)ensure they obtain a copy of the Power of Attorney for their file;
b)ensure they know the identity of their clients (both DONOR and ATTORNEY); and
c)ensure their client’s lawyer is aware that the Closing will be occurring by Power of Attorney.