Unlocking the Power of Attorney: What Queensland agents need to know

Understanding the intricacies of Power of Attorneys (POAs) and their correct usage is vital when dealing with real estate transactions. A Power of Attorney is a legal document that empowers a designated individual (the attorney or agent) to act on behalf of someone else (the principal). This authority allows the attorney to manage the principal's affairs, make decisions, and carry out specific tasks when the principal is unable to do so themselves.

Here in Queensland, a POA is subject to specific legal requirements to be considered valid. It must be signed by the principal and, in some cases, witnessed. Depending on its intended use, it may also require registration with Queensland government authorities. Let's dive deeper into the world of Power of Attorneys in Queensland.

Types of Power of Attorney

General Power of Attorney (Non-Enduring): This grants the attorney authority to act on behalf of the principal for a specified period or particular tasks. It becomes invalid if the principal loses mental capacity.

Enduring Power of Attorney (EPOA): This continues to be effective even if the principal loses mental capacity. It allows the attorney to act on the principal's behalf even when the principal can't make decisions for themselves.

Advance Health Directive (AHD): While not strictly a Power of Attorney, an AHD permits an individual to provide instructions about their future healthcare and treatment decisions, including appointing an attorney for health matters.

It's crucial to note that a Power of Attorney comes with significant responsibilities. It should only be granted to someone the principal trusts implicitly. The appointed attorney must act in the best interests of the principal and comply with all relevant laws and regulations. Seeking legal advice is advisable when creating a Power of Attorney to ensure that it meets all necessary legal requirements and accurately reflects the principal's intentions.

Best practices for signing contracts with a Power of Attorney

Real estate agents must ensure that contracts involving a Power of Attorney are handled correctly. Here are some best practices all real estate agents should follow:

Confirm the Power of Attorney Document: Before proceeding, request a valid and up-to-date POA document from the party acting as the Power of Attorney. Ensure it authorizes them to act on behalf of the principal in real estate transactions.

Verify the POA's Identity: Verify the identity of the Power of Attorney by requesting identification documents such as a driver's license, passport, or other government-issued photo ID.

Review the Contract Together: Sit down with the Power of Attorney and carefully review the contract. Explain the terms and conditions to ensure they understand all the details.

Have the POA Sign the Contract: Once the Power of Attorney has reviewed and agreed to the contract's terms, have them sign the document on behalf of the principal following the prescribed format.

Witness the POA's Signature: Depending on the contract and its requirements, you may need to witness the Power of Attorney's signature as per contract or local laws.

Confirm POA Authority: Double-check that the Power of Attorney has the authority to enter into real estate transactions on behalf of the principal and that their authority aligns with the specific transaction at hand.

Record POA Details: If necessary, record relevant details from the POA document, such as the date of execution and the registration number (if registered).

Provide Copies: After the contract is signed, make copies for both parties - the principal and the Power of Attorney. Ensure that all parties have a copy of the fully executed contract.

Submit the Contract: If required, submit the signed contract to the appropriate parties, such as the other party involved in the real estate transaction or the relevant legal authorities.

Comply with Legal Requirements: It's crucial to follow all legal requirements related to signing contracts with a Power of Attorney. Real estate agents shoudl familiarise themselves with the laws and regulations governing such transactions in Queensland.

Act in the Best Interest of the Principal: Always act in the best interest of the principal and maintain transparency throughout the process. Communicate effectively with both parties involved in the transaction.

Consider Legal Advice: If you have concerns or doubts about the Power of Attorney's authority or the legal implications of the transaction, seek legal advice for peace of mind.

A Power of Attorney carries significant authority, so it's essential to handle such transactions with care and diligence. If you're unsure about any aspect of the process, consult with the principal's legal representative or a qualified attorney to ensure compliance with all legal requirements.

Additional points to keep in mind:

Registration: The Power of Attorney must be registered with the titles office before settlement if the principal won't be able to complete the necessary documents prior to settlement. Be prepared to allow extra time for this process.

Deceased Principals: A Power of Attorney ceases to be valid once the principal passes away.

Fiduciary Duty: The attorney acting as the Power of Attorney has a fiduciary duty to act in the best interests of the principal. As a real estate agent or broker, it's essential to ensure that the attorney understands and upholds this responsibility.

Navigating the world of Power of Attorneys in Queensland, Australia, requires attention to detail and a commitment to following legal guidelines. By adhering to best practices and seeking legal advice when necessary, you can ensure that real estate transactions involving Power of Attorneys are conducted smoothly and ethically.

Thank you to Rebecca Petroff from Sunstate Conveyancing for sharing this very important information with us.