Ensuring that Power of Attorney doesn't kill your deal

Welcome to The Closer's Checklist, where I identify insights, learnings, and experience from my 15 years as a BC Notary to help you and your clients close residential real estate deals in BC safely and cost-effectively.

You can learn more about me and what I do as a BC Notary through my work at TNG Legal Services MDP here or through my work at The Notary Group here.

Let's get into it!

Powers of Attorney aren't an automatic passcard

We all know a Power of Attorney document (a "POA") appoints someone to deal with your legal and financial affairs. POAs are incredibly important documents, but they are easily abused and misused. Their use raises significant concerns when trying to identify fraudulent transactions.

Some very important steps should be taken as soon as you know a Power of Attorney is going to be used in a real estate transaction. It's not enough to merely have someone send you a copy of it which gets filed away unread.

It's also really important to determine whether the POA is homemade.

British Columbians can make their own POAs, but they must meet the stringent rules for how to make and sign a valid POA that is valid in the title system where their property is registered.

Failure to catch these issues could result in the real estate transaction collapsing.

Is it a BC POA?

If you are using a POA in any one of the BC title systems, that POA will need to either be made in BC under BC's Power of Attorney Act requirements, or it will need to meet the very narrow requirements for "out-of-province" POAs.

Just because you have a POA from another province or country does NOT mean you can use it in BC. In fact, POAs from many other countries are simply not recognized by BC.

Check to make sure the POA has been made under the BC Power of Attorney Act.

Get the original

First, get the original Power of Attorney. A copy won't work - it must be the original document.

Original documents are often (but not always) identified by a blue corner stapled to the top left of the document.

Look for original signatures - check ink colour and feel the paper to see if the signature makes an indent in the page.

If the POA was made by a BC Notary, you will often (but not always) see an impression seal by the BC Notary's signature. It's not a requirement for the BC Notary to use their seal on this kind of signature, but we will often do so as another signal that you are looking at an original document.

If you don't have the original, do NOT proceed with a copy. Stop everything until you have the original POA. Get your BC Notary involved right away.

Vet the PO

Once you have the original, you need to vet it to make sure it meets certain criteria. If you have questions about whether the POA you have been given meets this criteria, check with your BC Notary immediately.

Here are some key elements you need to review to vet the POA:

Is it intact?

Has the POA been taken apart? If so, we must verify whether it has been tampered with.

Check the staple that holds the document together. Can you see other staple holes nearby?

Are the pages in the right order? Have any of the pages been replaced or turned around? Are any of the pages a different colour or texture than others?

Has anyone made any handwritten changes on the POA itself?

All of these are indications that the POA might not be valid, in which case it should not be used.

There might be steps we can take to verify whether the POA has been tampered with. But these are not always going to work.

For example, if the BC Notary or lawyer who made the original POA is still in practice, we might be able to ask them to verify if the document you have matches the document the client made and signed with them. But if that BC Notary or lawyer is no longer practicing, this verification process might not be possible.

Does the POA have the right names on it?

If Joe is the registered owner on title, is the POA from Joe (not from someone else TO Joe)?

A recent transaction failed because the REALTOR? failed to actually look at the POA - it turned out that the document the family wanted to use was a POA made by the client's spouse, not the client.

Is Joe's name shown exactly the same on the title to the property as it is on the POA? Even things as small as a space or a hyphen in one version of the name (but not the other) can cause issues. Joe is not the "same name" as Joseph, or Joey, or Jean-Joseph.

Does the name of the attorney exactly match the ID of the person presenting themselves as the attorney?

Are there any "also known as" variants of either the adult's name or the attorney's name on the POA?

In some cases, small disconnects like spaces or hyphens can be fixed with statutory declarations, but larger disconnects that make it hard to validate the connection between the POA and the parties involved might not be fixable.

Do you have the right people in front of you?

If the POA names more than one person as an attorney, are those attorneys required to act together? Do you have all of the people named, if they are required to act together? Can they act separately?

Check the language in a POA appointing multiple attorneys very carefully to determine the circumstances under which the attorneys may act.

Has the POA been properly signed?

Check the date when the POA was made. Anything made before September 1, 2011 will have been made under the old legislation, and will not meet current signing requirements for certain title offices. Remediation measures can sometimes be taken to fix this, but we need time to see if these options are possible, and to put them in place.

Any POA made from September 1, 2011 onwards must follow the current legislative signing requirements.

Homemade POAs are particularly problematic here as they often miss important elements.

For example, the Power of Attorney Act has a certain set of signing requirements, but if you want to use the POA for land registered in the BC land title system, that POA must also meet the additional requirements set out in the Land Title Act.

If multiple attorneys have been named, it's important to determine which attorneys need to sign the document to be able to use it.

Get the original Power of Attorney to your BC Notary as soon as possible so we can check for these signing requirements.

Check for restrictions or specifications

POAs can contain restrictions. These restrictions can be outright bars to actions, such as "my attorney may not deal with my property at 1234 Sunset Boulevard".

They can also contain specifications - instructions to use the POA only for a certain purpose, such as "my attorney may ONLY deal with my property at 1234 Sunset Boulevard".

A classic mistake is for staff to simply get a copy of the POA from the client and put it in a drawer without looking at it.

If you don't actually review the POA to see if it contains restrictions or specifications, you could be very unhappily surprised when you go to use it, and it's too late to do anything about it.

POAs can also contain unintentional omissions or restrictions that make it hard or impossible to use the POA.

For example, BC's Land Title Office requires certain "magic wording" for restricted POAs to be valid and useable. If the POA you have been given contains restrictive language, get it to your BC Notary right away for review.

Specific POAs (POAs made to deal with just a specific property) can also contain mistakes in the legal or civic description of the land in the POA that make the document unusable.

A classic mistake happens with restricted or specific POAs dealing with rural properties - properties in rural communities often contain multiple legal descriptions. If the POA misses one of the multiple legals, it will be unusable.

This is particularly problematic for homemade POAs, where the adult who made the POA might not have known all of these intricacies.

Assess the situation for fraud

Ask questions about why the POA is being used.

Your BC Notary will ask the attorney to sign a declaration setting out several fraud prevention statements when the attorney goes to use the POA.

Some of these statements include:

• is anyone else supposed to be involved in this transaction?
• has the adult authorized the transaction?
• is the adult still alive?
• has the authority under the POA been terminated or revoked for any reason?
• is the property in question subject to a specific gift in a Will?

Register the POA

Depending on the type of property you are dealing with, the POA might need to be registered before it can be used.

The BC Land Title and Survey Authority (the "LTSA") manages a Power of Attorney registry, and any POA being used for a transaction in the LTSA must be registered in this registry. Registration is not automatic, and documents can be rejected if they do not meet certain criteria. A rejected document cannot be used for a real estate transaction in the LTSA system.

The Manufactured Homes Registry does not require a POA to be registered in its system, but it does require the legal professional to certify that they have a certified true copy of the document in their possession on the registration date.

First Nations registries do not always require separate registration of a POA, but your BC Notary may be asked to submit a certified true copy of the original POA when submitting documents for registration. Much depends on the title system being used by the particular First Nation.

In Closing

Powers of Attorney are immensely helpful documents. But their use now triggers significant fraud flags. Their use often requires a significant amount of additional vetting and review work before they can be used.

Some important steps need to be taken when allowing them to be used for real estate transactions.

Help us all by making sure you get the original Power of Attorney into your BC Notary's hands right away so we can identify any issues that could affect its use as soon as possible.

Have questions? We'd love to chat. Email us at [email protected] with your questions!