Contracts signed under Power of Attorney - What you need to know.
What you need to know about Powers of Attorney
At Tuckfields we are seeing more and more contracts signed under Power of Attorney on behalf of a Vendor. What exactly does this mean? We are so glad you asked!
In South Australia, a Power of Attorney is a legally binding document that gives authority to a nominated person the power to act as an agent and make decisions on another’s behalf. The person giving the authority is known as the Donor and the recipient of the authority is known as the Donee.
There are 2 types of Powers of Attorney – a General power for a specific reason e.g. to sign a contract on your behalf because you will be traveling at the time and for no other reason. The second type of Power of Attorney and the one that is more common is an Enduring Power of Attorney. An Enduring Power of Attorney generally gives the Donee full powers to act on behalf of the Donor notwithstanding any mental incapacity. However, some Enduring Powers of Attorney specifically state they are only to come into effect once the Donor is mentally incapacitated and in this case, a letter from the Donor’s Doctor is required.
When entering a Power of Attorney, it is essential that you trust the person you are nominating to act as your Donee. Once the document is signed the Donee will be making legal and financial decisions on your behalf. It is good practice to have a Solicitor draw up the Power of Attorney to ensure that it is prepared correctly and to discuss whether further documents are required such as a Medical Power of Attorney if the Donor is suffering an illness.
If you have been given the power to act on behalf of another and have signed acceptance to the Power of Attorney you will need to deliver the ORIGINAL Power of Attorney to our office as soon as possible if you have entered a contract. The ORIGINAL Power of Attorney (not a certified copy signed by a Justice of the Peace or Solicitor) must be lodged with Land Services SA for the property transaction to be completed by you. We will lodge the Power of Attorney on your behalf along with the registration fee which is currently $173.
Land Services SA will then check the Power of Attorney document for the correctness and issue the Power of Attorney with a registration number that is affixed to the document. Once registered you will then be able to use this document for future real estate transactions in your capacity as Donee. The ORIGINAL Power of Attorney will be returned to you once registered, for safekeeping.
When a Power of Attorney has not been completed or signed correctly either by the Donor or Donee or the instruction it conveys is unclear there can be significant ramifications.
If the Donor is no longer of sound mind you will be unable to sign a fresh Power of Attorney. Instead, you will be required to apply to the Guardianship Board for a Guardianship Order which can be a lengthy process and may cause an unforeseen delay in settlement.
A Power of Attorney is valid for the lifetime of the Donor. Once the Donor has died the Power of Attorney document is no longer valid and the Will of the Donor takes over. Depending on the type of ownership of the property probate may be required and once granted to the Executor(s) the Executor(s) have the capacity to make any further legal decisions pursuant to the deceased’s Will.
Are you confused?! Hopefully not, but if you are, contact the friendly team at Tuckfield Conveyancing with offices located in Vale Park (ph: 8344 3448), Morphett Vale (ph:8326 5294) and Kadina (ph: 8344 3448) and we will walk you through the process. You will discover we have up-to-date professional knowledge, years of experience and unparalleled service.