A power of attorney is a formal arrangement by which one person (‘donor’) gives another person (‘attorney’) the authority to act on his behalf and in his name. Powers of attorney are very useful when dealing with land transactions. Where a registered proprietor resides overseas but is unable to travel due to ill-health or for any other reason, he can execute a power of attorney granting another person (an attorney-in-fact) the power to deal with his property locally. Please bear in mind however, that the term ‘attorney’ is never to be equated with a trained attorney -at-law. The attorney in this context is simply equipped with certain authorities to exercise powers that the donor would have exercised had he been present. Set out below are a number of important points that property owners should have knowledge of before executing a power of attorney.
Firstly, the donor must be capable of understanding the nature and effect of the power of attorney he is purporting to grant i.e he must have mental capacity. This is of particular importance as the donor must be fully aware of the powers he is granting, as well as the consequences of granting such a power. Where it is found that the donor lacked mental capacity to create a power of attorney, the purported grant is invalid and any transaction between the attorney and a third party would be void. The fact that neither the attorney nor any third party was aware of the donor’s mental incapacity is irrelevant.
An attorney-in-fact can be anyone above the age of eighteen (18) years. However, the donor must ensure that the attorney is someone who is considered to be trustworthy as they are given the task of handling their most important real estate affairs. A power of attorney can be used to deal with a wide range of transactions concerning real estate and as such the donor must ensure that only the powers he intends to grant are stated in the document. For example, the attorney can be given the power to enter into sale agreements, leases, other contracts, transfers and mortgages in relation to properties owned by the donor. By entering into such agreements, the attorney may be able to sell, transfer or lease properties belonging to the donor as well as collecting all monies in relation to same. Importantly, the attorney may be given the power to institute legal proceedings in court on behalf of the donor in order to recover possession of properties owned by the donor.
Pursuant to the Registration of Titles Act, all powers of attorney concerning real estate must be executed as a deed, stamped with the requisite stamp duty and recorded in the Island Record Office.