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Nov 2022

Powers of Attorney in Real Estate Transactions

By Mirjana (Mira) Markovic and Brittany Zigmond

Powers of Attorney for Property ("POAP") can be registered as part of a real estate transaction when an incapable homeowner relies upon their attorney under a POAP to assist in the transaction. It should be noted that the other type of power of attorney, namely Power of Attorney for Personal Care, cannot be used for the same purpose. This is because the latter only permits medical and health care decision-making, whereas a POAP permits the attorney to make financial and property decisions on the incapable person's behalf. 

Law Statement Requirements when Registering POAP

Alternatively, an individual or a corporation may not be able to attend to a matter personally (i.e. if they are located out of the country or otherwise immobile), as such, authority may be delegated to a third party to carry out a particular act on their behalf. The delegation of authority is conveyed by a document called a POAP. As part of the Real Estate Fraud Action Plan, the Ministry has recently implemented changes with respect to the use of POAP for Property in real estate transactions by instituting a registration requirement that a law statement is necessary when an individual registers any document under the authority of a POAP. In these cases, a lawyer is required to discuss the POAP with their clients and provide the requisite law statement. Let’s take a closer look.

Recent concerns have been raised over the POAP Statements 2917, 2918, 2922, and 2923 in Teraview. Specifically, the above statements could contribute to the misuse of the Power of Attorney in fraudulent transactions because the statements relied on the assurance of the attorney/donee only. As such, these statements have been amended to require a solicitor to confirm, to “the best of their knowledge and belief”, the “good faith” of the Power of Attorney. These updated statements do not operate as an absolute guarantee by the solicitor however they serve as a reminder to solicitors to always consider the facts and circumstances surrounding the Power of Attorney before using and registering same.

  1. Where the attorney is an individual:

    Statements 2917 and 2922 as amended indicate that “The solicitor signing this document on behalf of this party confirms that I have reviewed the power of attorney with the attorney, and to the best of my knowledge and belief, I confirm that:

  1. The attorney is the lawful party named in the power of attorney;
  2. The attorney is acting within the scope of the authority granted under the power of attorney; and
  3. The power of attorney has been lawfully given and has not been revoked.
  1. Where the attorney is a company:

Statements 2918 and 2923 as amended indicate that “The solicitor signing this document on behalf of this party confirms that I have reviewed the power of attorney while the attorney, and to the best of my knowledge and belief, I confirm that:

  1. The attorney is the lawful party named in the power of attorney;
  2. The attorney is acting within the scope of the authority granted under the power of attorney;
  3. The power of attorney was lawfully given and has not been revoked; and
  4. At the time this document was executed, [name] was in the position of company/bank [donee] and had the authority to bind the attorney.

A law statement is not required in documents signed under the authority of a Power of Attorney given by a corporation or a bank. In such cases, the attorney will be required to make a statement that they are acting within the scope of the Power of Attorney.

Further changes were implemented to require the original signed and witnessed Power of Attorney or a notarial or certified copy of the original to be scanned into the electronic registration of a Power of Attorney. Similarly, provisions were made in the Regulation for electronic statements to require the scanning of a Revocation of a Power of Attorney into the electronic registration of a Revocation.

The Director of Titles has announced further amendments to the Power of Attorney Law Statements in 2023. This will not change the solicitor’s professional obligations relating to the POAP but will certainly place more pressure on solicitors to be prudent and to consider the facts and circumstances surrounding the Power of Attorney before proceeding to use it.

Tips and Traps in Registering POAP

Lawyers sometimes encounter issues when registering the POAP in Teraview because the POAP itself has a deficiency that renders it unregistrable. This becomes problematic, as POAP are most commonly used when the homeowner is no longer mentally capable of signing a correcting their POAP.

One of the common deficiencies in POAs is the inclusion of personal property information, for example, SIN numbers, driver's license information, or passport details. The lawyer cannot rectify the error by merely redacting it, as the Land Registrar will still refuse to register the POAP as part of the real estate dealing. The Land Registrar takes a "zero-tolerance" approach to POAPs with private information, and rightfully so because these documents will be public once registered. 

Another common issue when registering POAPs, is the document failing to be a stand-alone document. While, legally speaking, the Substitute Decisions Act does not require this, the Land Registrar isn't interested in canvasing through dozens of pages to locate the POAP buried within. Consequently, the Land Registrar could refuse to accept the document because the POAP was not "readily ascertainable". It is for this same reason that when a court order amounts to a defacto POAP, it cannot be registered with Teraview as a POA, as the contents are usually buried within the court order. Therefore, a court order amounting to a POAP should be registered using the Application Court Order document type in Teraview.

A POAP is a sufficient document to permit parties who are unable to attend to or otherwise are incapable of entering into real estate transactions. However, lawyers should take all necessary precautions when using and registering this document in such dealings.