On occasions a seller or a buyer will not be able to sign a document themselves but will instruct their attorney to sign under a power of attorney. These are some issues that need to be considered when dealing with a power of attorney.

Has the power of attorney been properly constituted?

There are two forms of power of attorney. The first is a general power of attorney and the second is an enduring power of attorney. The power of attorney should be checked to see if it has been properly constituted and whether there are any limitations imposed.

Who is giving the power of attorney?

This should be obvious in the case of an individual but care must be taken when dealing with companies. A power of attorney given by a company will usually be for the company only and will not be a power of attorney that allows the attorney to sign on behalf of individual directors.

Where a company acts as trustee, care must be taken to see if the power of attorney is given for the company in its own capacity, in its capacity as trustee of the trust of both.

Who is the attorney and how can he/she act?

This should be obvious in the case of one attorney. However, in the case of multiple attorneys further investigation will be required. Can those attorneys act independently or do they have to act jointly? This needs to be checked to ensure that a document is validly executed by the attorney(s).

More complex powers of attorney may appoint either named persons or persons who have a particular rank/title within a company. They may specify or place a limit on specific documents that the attorneys can sign.

Has the power of attorney been registered at the Titles Office?

Whilst an unregistered power of attorney can be used to sign a contract, a power of attorney must be registered at the Titles Office for any documents that need to be registered at the Titles Office.

These are just a few of the issues that need to be addressed when dealing with powers of attorney. Care needs to be taken to ensure that there are no anomalies which would lead to an invalid execution of documents.

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This article is for your information and interest only. It is not intended to be comprehensive, and it does not constitute and must not be relied on as legal advice. You must seek specific advice tailored to your circumstances.