Buying from Seller under Power of Attorney

I recently sought some guidance from a senior colleague where I was instructed to act for a Buyer, whose seller was selling under a Power of Attorney.  She armed me with the following information and I hope this also assists you!

It is not controversial to accept a sale under a Power of Attorney. This can be any type of Power, provided it is of course appropriate to the transaction (e.g. under s.25 Trustee Act (as amended by S.9 Powers of Attorney Act 1971) Powers should be to 2 different owners if 2 sellers and not a S.10 Powers of Attorney Act 1971 General Power), and includes the Lasting Power of Attorney.

Please note that the seller in the contract and the Transferor in the Transfer should be the name only of the registered proprietor. The Attorney is merely signing in place of the seller. The Attorney does not become the legal owner by virtue of the Power.

If the Seller’s solicitor insists that the contract and Transfer will be signed by an Attorney for the seller then it is in the signature box that the reference to the Attorney arises – the Attorney should write the following: [name of legal owner] by his / her Attorney [signature of Attorney] (the Land Registry also allows some other similar wording –you may wish to verify the Land Registry’s requirements if you require confirmation).

Care should also be taken to ensure:

(a) that it has been properly executed;

(b) that if an LPA it is registered at the Court of Protection – a search can be made of the Office of Public Guardian Register as an independent check that the LPA has been registered: https://www.gov.uk/find-someones-attorney-or-deputy. There is no fee charged by the OPG. Any extra fees chargeable for your undertaking this work should be notified to your client under an extra costs letter.

(c) you may wish to run an LPA past a Private Client lawyer

(d) that there are no special instructions in an LPA restricting how the power is to be exercised (e.g. “Donor is only authorised to sell property in the event of X”);

(e) that a General Power includes the ability to sell the property

(f) that the PoA has been properly certified (which in the case of all PoAs should mean that each page has been certified (as per section 3 of the PAA 1971) – although in practice the Land Registry will usually accept a photocopy that is certified ‘on its face’ and endorsed by the conveyancer with his name and address (in accordance with rule 217 of the Land Registration Rules 2003)); and

(g) that you are aware of the following Land Registry requirement: All joint proprietors hold the registered legal estate as trustees. A general, enduring or lasting power of attorney dated after 29 February 2000 may be used in relation to trust property if, at the time it is used, the donor of the power owns a beneficial interest in that property unless contrary intention is shown in the power (section 1(1) of the Trustee Delegation Act 1999).

A written statement by the attorney given within 3 months of the date of the document confirming that the donor had a beneficial interest in the property is, in favour of a purchaser, conclusive evidence that the power could be used (section 2(2) of the Trustee Delegation Act 1999).

The most convenient place for the attorney to make this written statement will be in the disposition itself. The attorney may include a statement on the following lines in the additional provisions panel of a TR1 or other prescribed form, or in the body of a lease or charge:

(Name of attorney) confirms that (donor of the power) has a beneficial interest in the property at the date of this (transfer, charge etc.)’

Alternatively, the attorney may adapt the attestation clause as follows:

‘Signed as a deed by (name of donor of the power), who has a beneficial interest in the property at the date of this (transfer, charge etc.), acting by (his/her) attorney (name of attorney) in the presence of …’

Alternatively, the attorney may expand the words of signature as follows:

‘John Smith by his attorney Jane Brown who confirms that the donor has a beneficial interest in the property at the date hereof.’

I would also recommend the Land Registry’s Practice Guide 9 re Powers of Attorney, for more information.

Til next time

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