A power of attorney is a legal document authorising a person or organisation to make legal and financial decisions on your behalf. The powers under a power of attorney includes buy and sell properties in Australia.

However, you might be asking this: why do I need a power of attorney in the first place? More importantly, whom should I choose to manage my financial affairs?

In this article, we’ll answer some of the most pertinent questions and concerns about power of attorney in real estate.

What is a Power of Attorney and Why Do I Need One?

A power of attorney is a written legal document authorising someone to decide for you regarding your legal, financial, or business affairs.

This document is often for a specific purpose and a definite period. But why prepare a power of attorney?

Uncontrollable things happen in life. You could become sick or get into an accident, for example. Having a power of attorney ensures that someone can take charge if something unexpected happens to you.

Some of the usual reasons for preparing a power of attorney include:

  • travelling, working, or living overseas
  • sudden illness, infirmity, or hospital confinement
  • inability to go to banks, government offices, etc.
  • elderly parents or family members
  • personal choice to have an experienced person handle their assets and finances

It is not necessary to have a power of attorney. However, this document can protect you if you suddenly cannot make important decisions.

Moreover, preparing a power of attorney in advance means your family won’t have to go through a potentially difficult court process before they can decide on your behalf.

What are the Uses and Limits of a Power of Attorney in Real Estate?

One of the vital applications of a power of attorney is selling a property. However, this power can also work on other real estate matters, like:

  • buying a property using the principal’s name and funds
  • leasing out the principal’s property to chosen tenants
  • paying bills, collecting rent, or settling debts
  • operating bank accounts
  • managing property investments or making investment decisions
  • signing legally binding documents

As you can see, the power of attorney covers critical duties. So, when preparing this document, it is essential to clearly state the specific tasks an “attorney” can perform. The property owner may also indicate a time limit.

For example, if the principal will be out of the country, they can use the limited power of attorney to have someone make property-related decisions until their return.

A principal temporarily incapacitated due to an accident may do the same until they are well enough to manage their properties.

Do I Need to Register My Power of Attorney?

Registering a power of attorney is not necessary.

If you want your “attorney” to sell, lease, mortgage, or perform similar property-related tasks, you can register your power of attorney at the Land Titles Office in your state in Australia (usually in NSW and QLD).

Your registration form will get a stamp and a number that your “attorney” will use when signing documents on your behalf.

This registration number turns your power of attorney into a public document that government offices and financial institutions can easily verify and accept.

Who Should I Appoint as My Attorney?

Your authorised “attorney” could be a family member, close friend, lawyer, accountant, or trustee organisation.

Given the legal and financial responsibilities enclosed in a power of attorney, your appointed person must be trustworthy and reliable.

They should also be of the right age and have the time and capacity to take on this significant role.

When choosing your “attorney”, choose a person who:

  • has experience or skills in managing financial matters
  • can keep accurate and organised records of transactions
  • will act according to the conditions stated in the power of attorney
  • will keep their finances separate from yours
  • has high respect for your views and rights

Carefully choose your authorised person to avoid abuse of power. You may also appoint a backup attorney should something happen to your primary attorney.

Seek Legal Help Before Granting a Power of Attorney

Preparing a power of attorney is one way to safeguard yourself, your family, and your properties.

However, this legal document also holds considerable power and responsibility. So, choose someone who will always act in your best interest.

For added security, it is best to get legal and professional advice when choosing your attorney, especially if the circumstances involve large sums of money or assets.

If you need help writing or registering your power of attorney in Victoria, TNS Lawyers are here to help. You may contact our team at +61 3 9052 3214 or email us at info@tnslawyers.com.au.