When selling a house under power of attorney, how do you authorise someone else to sign the sale documentation on your behalf?
For example, if you are overseas and wanting to sell a house in New Zealand, can you authorise someone else to sign the transfer documentation for you?
The answer is yes and the common way of doing this is by signing a document granting power of attorney.
New Zealand law recognises two kinds of powers of attorney: simple (non-enduring) powers of attorney and enduring powers of attorney. Both can be used to authorise someone to sign legal documents on your behalf.
Simple Powers of Attorney
A simple Power of Attorney is a document that you sign as a deed that authorises another person to act on your behalf and to sign legal documents on your behalf either in relation to your property matters generally, or in relation to specific matters (such as one particular house). When you grant a power of attorney to someone else, they are authorised to bind you to legal commitments such as contracts and transfer documents. When they sign those documents as your attorney, you are bound by their signature.
Simple Powers of Attorney can only be used while you, the person who granted the power, retain mental capacity.
A simple Power of Attorney can be particularly useful where a person knows they are going overseas for some time and might need someone to act on behalf of them back home.
Enduring Powers of Attorney
New Zealand law recognises two kinds of Enduring Powers of Attorneys: in relation to property and in relation to personal care and welfare.
Under an enduring power of attorney in relation to property, like with a simple power of attorney, the attorney is authorised to act on your behalf and to sign legal documents on your behalf either in relation to your property matters generally, or in relation to specific matters.
With an Enduring Power of Attorney, your attorney can continue to act on your behalf even if you lose mental capacity to make legal decisions for your self.
Using a Power of Attorney to Sell a House
So what happens when an Attorney under a Power of Attorney is required to sell a house? The following is a summary of the steps that will take place when you sell a house as Attorney under a Power of Attorney:
- Ensure that you have the power under the Power of Attorney to sell the property
- You can sign documents for the sale on behalf of the Donor
- Keep a certified copy of the Power of Attorney handy
In order to have the power to sell property on behalf of the Donor, the Attorney must be appointed under a Power of Attorney in relation to Property, and the wording of the Power of Attorney must be wide enough to include sale of the property that the Donor is wanting to sell.
Loss of mental capacity
When signing an Enduring Power of Attorney, the Donor can elect that this power only come into effect once they have lost mental capacity, or come into effect immediately. If you are relying on an Enduring Power of Attorney in relation to property, you need to check whether it is in effect yet.
If the Enduring Power of Attorney only comes into effect on loss of mental capacity, the attorney will need to confirm that the Donor has lost mental capacity (usually this can be done by obtaining a medical certificate from a qualified medical practitioner).
Another important point to check is whether there are any other Attorneys appointed and whether or not you are required to act jointly with them. Sometimes the Donor will also specify that you are required to consult with another person before making any decisions on their behalf.
When you are signing any documentation on behalf of the donor, a Certificate of Non Revocation will normally be signed at the same time as any document is signed. This records the fact that as far as the attorney is aware the power of attorney has not been revoked or suspended.
Sale and Purchase Agreement and other Legal Documents
As with any usual sale of property, an Agreement for Sale and Purchase will be signed. Closer to settlement day, an Authority and Instruction Form and Land Transfer Tax Statement will need to be signed, along with any other documentation required for the particular sale. If you have confirmed that you have the power to sell the property as Attorney, you can sign this sale documentation on behalf of the Donor.
When you are signing documents such as the Agreement for Sale and Purchase on behalf of the Donor, you will need to ensure that you have a certified copies of the Power of Attorney handy to attach to any relevant documentation, as some parties may require seeing evidence of the signed power of attorney.
This article contains some general comment on use of Powers of Attorney, but is not legal advice on any particular situation. You should not rely on this article as a substitute for actual legal advice. Parry Field Lawyers have a specialist team who have experience in a range of different matters relating to Powers of Attorney, Asset Planning and Succession. If you have any questions, please do not hesitate to contact us on 03 348 8480.
You might also like:
- Property Law and Legal Documents for Buying and Selling
- More home sellers using a real estate broker
- Hidden and Actual Costs of Selling a House
Article published July 9 2020 | About