Powers of Attorney in Kelowna Real Estate, a guide for Realtors…..

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)?

  1. Is the Donor (person granting the POA) ALIVE and NOT BANKRUPT?
  2. Has the ORIGINAL Power of Attorney been given to my client’s lawyer for filing in the Land Title Office?
  3. 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?
  4. Am I aware of any action by the Donor or Attorney which would void or terminate the Power of Attorney?
  5. Are ALL signatures on the Power of Attorney document witnessed by a lawyer/ notary?
  6. 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)?
  7. If the Seller is incapacitated and the sale is to occur by POA, does the Power of Attorney “continue when incapacitated”?
  8. 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. 

Selling Property with Elderly Clients: Powers of Attorney and Probate

1. Determine if there is a valid Power of Attorney in place.

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). In British Columbia the statute (law) governing powers of attorneys has recently changed and new rules apply to have a valid Power of Attorney. If the Power of Attorney was drafted prior to 2012, the Seller should meet with a lawyer familiar with the recent legal changes.

Importantly an Original Power of Attorney must be available as this document must be filed (or already filed) in the Land Title Office to allow for the transfer of land. Realtors should note that a Power of Attorney is only valid to sell property while the Donor is alive. If the Donor should pass away prior to executing a Form A Transfer, the power of attorney will not be legally sufficient to transfer title to the lands.

 2. Do some fact finding on the nature of any Joint Tenancies on Title

Joint Tenancies can muddle a property title where one of the spouses has predeceased the other. Where one spouse has passed away and the property is held in joint tenancy, the property passes outside of the estate and vests solely in the surviving joint tenant. Often times the surviving spouse neglects to effect this change of title in the Land Title Office and fails to file the required Land Title forms. To avoid questions and potential closing complications, it is recommend that the Form 17 Transfer to Surviving Joint Tenant be filed as soon as possible, and not later than at the time of listing the property. There is no property transfer tax payable when the property vests to a surviving joint tenant.

3. What happens where adult children are holding title along with their parents as joint tenants?

Generally, this situation should not be entered into without legal advice. Although in some cases this is valid and effective estate planning, in most cases this arrangement and the legal consequences that flow from them have not been fully explored.

From a liability perspective joint tenancy with children may give rise to a number of legal issues, including:

  •  if the child is a minor the Public Guardian approval is required to transfer the property to any third party.
  •  If the child does not reside at the residence there is no principal residence capital gains tax exemption available for the child’s interest in the property and therefore unexpected capital gains may arise on sale
  •  If the child claims it is only “holding the property for estate purposes” to avoid the capital gains tax in #b, then the arising trust may give rise to Wills Variation Act claims against the estate.

If adult children are on title with their parents, the adult child must also sign the listing agreement (as they are a legal owner of the property even if they are not claiming a beneficial interest). Clients in these situations are well advised to seek accounting and legal advise BEFORE entering into a binding contract as they may not foresee the adverse tax consequences in completing the transaction.

4. Where the property owner is deceased and dies WITH A VALID WILL, how can the estate sell the property?

Immediately upon the death the owner (assuming there are no surviving joint tenants), all powers of attorney cease to be effective to transfer title to the property.

The appointment of the executor or trustee within the VALID WILL determines who has the capacity to sell the property. This is determined by the court in a process called PROBATE where the estate submits the Deceased’s last will and testament to the Court for approval of its validity. Once a Grant of Probate has been obtained, this Grant of Probate can be filed with the Land Title Office to enable the property to be sold by the estate.

If the Grant of Probate has not been obtained the Seller/ Executor is not yet in a position to complete the standard terms of the contract of purchase and sale, that is to say that they cannot legally deliver a registrable transfer as required under the contract.

If a contract is entered into prior to the grant of Probate, that contract must be “subject to the seller obtaining a grant of probate”. It should be noted that litigation proceedings, for example Wills Variation proceedings may still block a sale of the property after a Grant of Probate has been obtained with the placement of a certificate of pending litigation on the property.

5. Where the property owner dies without a will, who can sell the property?

When a person dies without a will, the Estate Administration Act governs who may apply to the court to administer the disposition of the estate. In order of priority these people are: spouses, children, grandchildren, parents, siblings, other next of kin by degree of relationship. If there are no heirs, the Public Guardian and Trustee may administer the estate.

The Court must issue Letters of Administration before the applying Administrator has any right to dispose of the property.

We often assist Kelowna Realtors and Kelowna Executors and Kelowna Estate Administrators dealing with these all situations, we are happy to help.


Written by Peter Borszcz, a Kelowna Real Estate Lawyer and Kelowna Business Lawyer. 

Church Property Act

It must be wedding season, as I am definitely seeing a theme in this month’s blog posts! Recently I noticed a “FOR SALE” sign beside a church on Richter Street by my office listed by a local Realtor.

Did you know that a special law applies whenever a chuch is bought, sold or mortgaged in BC?

The Trustee (Church Property) Act applies to every “religious body, society or congregation” who holds property and governs how title to the property is held, mortgaged, leased and sold. Generally speaking, the person dealing with the property (the Trustee) has to be specifically appointed and empowered by the congregation to deal with the Church Property. The appointed Trustees may then buy, sell or mortgage church property on behalf of the congregation.

Therefore, when dealing with church property, whether it is a church building, meeting hall, or a minister’s house, it is important that you discover who has the authority to sign the contract of purchase and sale, and all closing documents. When property is held in trust, you must make sure that the person you are dealing with is a properly appointed trustee, and they are acting within the bounds of their authority.

On a side note, The Property Transfer Tax act also has an exception for charitable or religious organizations when “acquiring property for a charitable purpose”. Therefore where a non-charitable buyer of the property is involved Property Transfer Tax will be payable.


Written by Peter Borszcz, a Kelowna Real Estate Lawyer and Kelowna Business Lawyer. 

Technical Bulletin for Realtors: Update to Standard Contract of Purchase and Sale

The Standard Contract of Purchase and Sale was recently updated to add the word “non-refundable” to Paragraph 12.

“12. TIME: Time will be of the essence hereof, and unless the balance of the cash payment is paid and such formal agreements to pay the balance as may be necessary is entered into on or before the Completion Date, the Seller may, at the Seller’s option, terminate this Contract, and, in such event, the amount paid by the Buyer will be non-refundable and absolutely forfeited to the Seller in accordance with the Real Estate Services Act, on account of damages, without prejudice to the Seller’s other remedies.”

This change is likely a response to the recent BC Supreme Court decision in Tang v. Zhang, 2012 BCSC 214, which was released in April 2012. In this case, the court was resolving two different lines of judicial authority.

  1. In the first line of decisions, citing Williamson Pacific Developments the language of the standard form contract creates a non-refundable deposit scheme that does not require proof of damages.
  2. In the second line of decisions, arising out the more recent 2009 BC Court of Appeal decisions in Agosti the standard form contract, without the non-refundable wording, does not create a non-refundable deposit scheme. In the Agosti line of cases, a Seller is required to prove damages in Court in order to recover that amount.

By adding the word NON-REFUNDABLE to the standard contact of purchase and sale, the law cited in Williamson Pacific applies and BUYERS who fail to complete or otherwise default on the terms of their contract are setting the MINIMUM damages that a defaulting buyer will be liable for.  Importantly this is a MINIMUM, a Buyer who defaults on a contract of purchase and sale may be liable for all the Seller’s damages, among other things, loss of profits, reselling and commission costs, and mortgage carrying costs.

Note the BC Supreme Court in Tang v. Zhang noted that “this issue seems destined for the Court of Appeal” so this is likely not the last word on this issue. Stay tuned…

Peter Borszcz is a Real Estate Lawyer and Business Lawyer at PIHL Law Corporation in Kelowna, British Columbia.


Saving Your Client Money in a Real Estate Transaction

This weeks blog post is definitely not legal advice, however growing up in the Real Estate industry for the past 34 years, there are definitely a few ways I have discovered that both Realtors and Lawyers can add value to their clients transaction:

Negotiate from a position of strength – in short, ensure that your client has done everything they can do to help a deal move forward. This includes obvious things like obtaining a pre-approval and limiting subject conditions only to “bare essential items” (like title review, strata docs, home inspection, financing). However, taking this to the next level means having this discussion with your client:

    1. What is the BEST outcome if the deal does NOT go through? And
    2. What is the WORST outcome if the deal does NOT go through?
These two questions very quickly get to the heart of your client’s motivation.

Setting good dates – everyone wants to close at the end of the month, this means that you client is just one of many people needing services from lawyers, movers, strata companies. The best advice here is to remove subject conditions at least 30 days prior to closing, and have closing occur on the “off-weeks” during a month (ie; those weeks that do not contain the 15th or 30th).

    Knowing the Local Area – there are many areas in the Central Okanagan where housing costs will be dramatically different for a number of reasons that are not immediately apparent from the listing, for example:

      1. Are you too far from a fire hydrant/ protection area to obtain cost effective fire insurance (Some parts of the Upper Mission)?
      2. Does the area you are in have such poor water quality which will necessitate you bringing in outside sources (ie; Glenmore – Ellison Irrigation District)?
      3. Does the smaller municipality mean that you property taxes are going to be markedly higher (ie; Lake Country, Peachland)

    Search out Hidden Costs

      1. Get a good home inspection, but then get a follow-up expert inspection if anything substantive arises (ie; roof, foundation, building envelope/ water, electrical, plumbing).
      2. Get to know your strata council – everyone reads strata docs, this is standard. However don’t be afraid to take the extra step of calling the Strata Council President, you’d be surprised what doesn’t make it into the minutes.

    Higher Standards for Property Disclosure Statements

    In BC, Sellers have a choice with Property Disclosure Statements (“PDS”), they could either:
    a) simply cross them out and do not complete the questionaire and mark “as-is”; thus the principal of “buyer beware” would apply (Smith, 2005 BCSC 635); or
    b) they would have to fill out the PDS “to the best of their knowledge” (Curtin v. Blewett, 28 RPR 3d 115).

    Now, a recent Ontario Court of Appeal case, Krawchuk v. Scherbak 2011 ONCA 352, seems to impose a markedly higher standard on sellers who chose to fill out the PDS. The ONCA stated that Sellers, once they have chosen to complete a PDS have an obligation to “provide to the extent possible, accurate and complete information” and the Court went onto say that the Vendor was liable despite the fact that they “tried to be honest”.

    Although not technically the “law” in British Columbia, this case will be compelling for BC Courts. Realtors should always advise Sellers that they have an obligation to “look further” if there are “issues” with a property of which they are aware. 

    Of note also in this case, the Realtor, who has a dual agent, was liable to both the Buyer and Seller and had judgement against them for over $100,000 for failure to a) emphasize the importance of a home inspection to the Buyer and b) emphasize the importance of making full and complete disclosure to the Seller.

    For those looking for the full text of the case it can be found here:

    The BC Real Estate Association in its July 2011 Issue of “Legally Speaking” discussed this case and came to the conclusion that “the outcome of the case would have been different had the case been decided in BC”. With respect this ignores the fact that the Court on Ontario has changed the law in Ontario and this case now gives more traction to a BC Court wishing to similarly change the law in BC.

    But… stay tuned… this case has submitted for leave to appeal to the Supreme Court of Canada…

    Execution of Real Estate Contracts

    A. Contracts Must be In Writing

    Real Estate Contracts, as contracts for the sale of land, are unique in British Columbia law as s.59 of the Law and Equity Act states that “A contract respecting land or a disposition of land is not enforceable unless there is, in a writing signed by the party to be charged or by that party’s agent, both an indication that it has been made and a reasonable indication of the subject matter

    In the historical case of McKenzie v. Walsh, the Supreme Court of Canada made it clear that no particular form of contract for the sale of land was required, simply a contract “in writing” (email would likely qualify in 2009), which specifies all fundamental terms including: Parties, Property, and Price.

    B. Real Estate Agents are Held to a Higher Standard

    But, as the fictitious contract case of Wu points out, a suspension case brought by the Real Estate Council of British Columbia, a Real Estate Agent has a an obligation to ensure that the contracts they are presenting on behalf of their clients are legitimate and well intentioned. Therefore, real estate agents (and lawyers) are held to the standard of an expert vis a vis their clients when drafting and presenting contracts.

    C. Witness of Documents is Important for Contracts, Essential for Land Title Documents

    Having a real estate contract properly witnessed is a cornerstone of a good contract because it validates the contract with the written evidence of an independent third party who may refute later claims of identity, mistake, duress or undue influence during an action for breach.

    On the Closing Date, when a transfer or mortgage is to be registered in the Land Title Office, the Land Title Act applies an higher standard stating there shall be no registration or charge registered in the land title registry unless that charge is witnessed properly by an “officer” (which includes lawyers in the Province of British Columbia). This is a key reason why lawyers are an integral part of every real estate transfer in British Columbia.

    D. Special Consideration for Corporate Purchasers

    Generally the law in British Columbia states that a corporation that does not exist (ie; because it has yet to be incorporated or it has been dissolved), cannot enter into a valid contract, unless that contract is specifically adopted by the corporation after incorporation. Therefore, if you are dealing with a corporate purchaser it is prudent to ensure (by calling your client’s lawyer) that that corporation is in good standing with the Corporate Registry.

    E. Special Consideration for Execution by Power of Attorney

    Often, elderly or non-resident clients wish another person (other than their agent) to function as their attorney for the execution of documents. Real Estate Agents should ensure that they have a copy of the valid power of attorney and this power of attorney should be registered in the land title office to ensure its validity on the Closing Date.