Blog

The use of power of attorney in real estate transactions

  • Tue 10 Sep 2019
  • 329
Vetra  Property Blog

It is now a common practice for land owning families or communities to donate a power of attorney to real estate marketing companies to sell their lands to the public. Sometimes, It might be that an owner of a property who reside abroad wants to sell his or her property in Nigeria but cannot return to Nigeria to effectuate the transaction. It may also be that the owner of the property is very ill and is not in a position to engage in the transaction to sell his property. In any of these situations, the owner can donate a power of attorney to someone to act for him.

Power of Attorney is defined as an instrument granting someone authority to act as agent or attorney-in-fact for the grantor. (See black’s law dictionary, 9th ed. P.1290). Where an owner of a property gives a power of attorney to an attorney to sell his property and execute a deed of assignment in favor of a purchaser, such power of attorney shall be made by deed. See Abina V. Farhat (1938) 14 NLR 17. A power of attorney given for a valuable consideration must be expressed to be irrevocable. A power of attorney coupled with interest and given for a valuable consideration is irrevocable until the benefit for which it is conferred has been realized. A purchaser who relies on such power of attorney will be affected by any act of the donor or his death. See s.8 of the Conveyancing act, 1881, s.143 (1)(i) property & Conveyancing Law, western Nigeria, 1959. Where the power is not for value, it should be expressed to be irrevocable for a fixed term not exceeding one year and a purchaser dealing with the donee of the power even if the donor is dead, under disability or bankrupt to the donee’s knowledge is protected by law. (See s.9  Conveyancing   Act and s.144(1) of Property & Conveyancing Law).  A power of attorney requiring the done to execute a deed of assignment in favor of a purchaser should be registered at the lands registry. Thus a power of attorney is only registrable where it specifically relates to interest in land. For example where a power of attorney provides that the donee of the power can enter into any arrangement with any person or persons concerning the donor’s land including sale or disposition of the said land and that in the event of such sale or disposition, the Deed of Assignment shall be executed by the donee, such power of attorney is a registrable instrument. But a power attorney which merely requires the done to manage a property, collect rent or issue statutory notices to tenants is not a registrable instrument since the exercise of the power does not relate to or affect any interest in land.

source:excellentpropertymag.com