Using A Power Of Attorney For Real Estate
Whether you are leaving the country for long periods of time or nearing old age, you may wish to appoint a trusted individual or entity to handle your real estate matters on your behalf. In such situations, a specific real estate Power of Attorney can come in handy. There are also general Power of Attorneys that allow an individual or entity to step into your shoes and manage your affairs with a few restrictions including selling your home, managing your bank accounts, selling your investments, paying your bills and making medical decisions. However, if you wish to have an agent perform a specific action on your behalf, such as selling your house, you should obtain a real estate Power of Attorney. Keep reading to find out more about real estate Power of Attorneys.
What Is A Real Estate Power Of Attorney?
A real estate Power of Attorney is a written, signed, witnessed and notarized document that allows others to make decisions on your behalf including selling, purchasing or refinancing your real estate.
Who Should I Pick As My Attorney?
While the Alberta Powers of Attorney Act (the “Act”) refers to the word “attorney”, the person chosen as your Power of Attorney (the “Attorney”) need not be a lawyer. In fact, according to the Act, it can be any individual over the age of 18 or even entities such as financial institutions, trust companies and legal professionals. Further, your Power of Attorney must have full mental capacity and understand their duties in fulfilling their role. Most individuals pick someone they know and fully trust, such as their spouse, adult child, or other family member.
Accordingly, when deciding who your Power of Attorney should be, you should consider:
- if this individual manages their own affairs well and has a good understanding of real estate matters;
- if you trust this person to always act in your best interests;
- whether this individual has the time and capacity to take on tasks beyond handling their own affairs; and
- if you are confident in relying on this person to execute the tasks fully and competently.
Attorney Legal Obligations
Pursuant to the Act, your Attorney is legally obligated to:
- keep proper accounts pertaining to your real estate matters;
- treat all information concerning your affairs confidential;
- report all of his or her activities to you; and
- always act in your best interest.
Restrictions Buying or Refinancing Properties With A POA
As long as it is properly drafted and executed, no legal restrictions exist in Alberta for using a real estate power of attorney. While a real estate Power of Attorney is commonly used to purchase or refinance real estate, some lenders restrict this. Consequently, you should check with your lender to ascertain their requirements regarding Power of Attorneys. In particular:
- Scotiabank accepts instructions from a Power of Attorney provided that the lawyer that prepares the mortgage also prepares and witnesses the agent’s signature on the Power of Attorney;
- RBC allows a Power of Attorney but requires you to purchase a title insurance policy; and
- TD accepts instructions from a Power of Attorney provided that they meet certain conditions. These include receipt of: at least two days’ notice, information between the person requiring the Power of Attorney and the Attorney and details on why a requirement for a Power of Attorney exists.
Because lender requirements and policies change, the above list may not reflect your lender’s policies. Contact your lender to determine their requirements surrounding Power of Attorneys to avoid delays in your real estate transactions.
Are There Any Issues with Using a Power of Attorney to Sell Property?
Provided that the Power of Attorney is drafted properly and specifically allows your Attorney to sell property, there few issues with utilizing a Power of Attorney to sell property exist. The real estate lawyers at Kahane Law Office are happy to assist you with drafting your power of attorney. Please note, restrictions exist on a POA’s ability to transfer property using a POA into their own name.
When does a Power of Attorney Expire?
Unless you specify when your Power of Attorney ends, it continues to have effect until:
- you pass away; or
- you become mentally incompetent.
Can A General Power of Attorney Work For Real Estate Matters?
In Alberta, the Land Titles Office inspects your Power of Attorney to ensure it meets legal and procedural requirements before registering it. A common issue with using a general Power of Attorney to deal with real estate matters is that it fails to address whether the Attorney is authorized to deal with land, real property or real estate. Thus, if the Power of Attorney cannot be registered at the Land Titles Office, title cannot be transferred. In other words, you cannot sell, buy or refinance the property.
Help with Drafting Your Power of Attorney
To avoid delaying your Attorney’s ability to handle your real estate matters, ensure that you have a properly drafted Power of Attorney. Contact our real estate lawyers at Kahane Law Office. We ensure the property drafting and execution of your Power of Attorney at an affordable rate. In most cases, we can answer any questions you may have, prepare documents according to your instructions and meet with you to sign your Power of Attorney in one visit to our office. We even have same or next day service when needed. We are also happy to attend your residence or health care facility to sign the documents. You can reach us toll-free at 1-877-225-8817, 403-225-8810 locally or email us directly here.