Buying or Selling Property Under a Power of Attorney in BC

Adult children often find themselves selling a parent's home under an enduring power of attorney, and owners who will be out of the country during a deal often sign a power of attorney so someone else can complete it for them.

Both work in BC, but the Land Title Act has specific requirements for the power of attorney itself, and the Power of Attorney Act sets duties that shape what an attorney can do with the property and the money. Checking these before listing or writing an offer avoids delays at completion.

Which kind of power of attorney do you have?

BC has two main kinds, and the difference matters for a property deal.

• A general power of attorney. Under section 9 of the Power of Attorney Act, a general power of attorney can be made in a short form that lets the attorney do anything the owner can lawfully do by an attorney, subject to any limits written into it. It is often used when an owner is travelling or living abroad. It does not carry on if the owner loses mental capacity.
• An enduring power of attorney. Defined in section 10 of the Act, it continues to have effect while, or comes into effect when, the adult is incapable. This is the document families usually rely on when a parent can no longer manage their affairs.

Read the document itself before anything else. Some are limited to particular property, some say when they take effect, and some name more than one attorney who must act together.

What the land title office needs

A transfer or mortgage signed by an attorney goes through the Land Title and Survey Authority like any other, but Part 6 of the Land Title Act adds steps.

• Filing the power of attorney. Under section 51, an instrument signed by an attorney must not be registered unless the original power of attorney, or a properly certified copy, is filed with the registrar. If the original is filed with an application for its return, the registrar can certify a copy and return the original.
• How it was signed. The power of attorney itself must have been witnessed or proved in the way the Act requires for instruments.
• Age of the attorney. The attorney must be at least 19, and proof of that is given when the power of attorney is filed.
• The 3-year rule. Section 56 says a power of attorney filed in the land title office is not valid for the purposes of the Act after 3 years from the date it was signed, unless it expressly excludes that rule. An enduring power of attorney filed under section 51 is treated differently: it remains valid until an order terminating it is filed, unless it ends another way. An older general power of attorney is a common source of last-minute problems.

When the attorney signs the transfer, section 45 means the witnessing officer is certifying that the attorney acknowledged having no knowledge of the owner's death or bankruptcy, or of the power being revoked, and, for an enduring power of attorney, no knowledge of any suspension or termination of their authority. The attorney signs in their own name and shows that they sign as attorney.

The attorney's duties when selling a parent's home

An attorney under an enduring power of attorney is not free to treat the home as their own decision. Section 19 of the Power of Attorney Act requires the attorney to act honestly and in good faith, with the care of a reasonably prudent person, within their authority, and in the adult's best interests, taking into account the adult's current wishes, known beliefs and values. The attorney must give priority, so far as reasonable, to the adult's personal care and health care needs and must keep the adult's money separate from their own.

One rule surprises many families. Section 19(3)(d) says the attorney must not dispose of property the attorney knows is the subject of a specific gift in the adult's will, unless the sale is necessary to carry out the attorney's duties. If the will leaves the house to a particular person, the reason for selling needs to be clear and documented. Section 21 also bars the attorney from making or changing a will for the adult. Our article on what an attorney can and cannot do covers the duties more broadly.

When the attorney wants to buy, or be given, the property

Section 20 allows an attorney to receive a gift or loan from the adult's property only if the enduring power of attorney expressly permits it. A sale of the adult's home to the attorney, or to the attorney's family, is a conflict of interest that sits uneasily with the duty to act in good faith and in the adult's best interests. If that kind of sale is being considered, get legal advice first. Steps such as an independent appraisal, involving other family members, or asking the court for directions under section 36 may be needed.

Buying property under a power of attorney

An attorney can also sign for a buyer. Section 52 of the Land Title Act says that, unless the power of attorney expressly provides otherwise, the attorney's powers over land the owner held when it was signed also apply to land the owner acquires later. The buyer is still the transferee for property transfer tax: under section 2 of the Property Transfer Tax Act the transferee pays the tax and files the return on registration, and exemptions depend on the buyer's own circumstances. See our guide to property transfer tax in BC. Mortgage lenders may also have their own requirements for documents signed by an attorney, so raise it with the lender early.

A short checklist before you list or write an offer

• Find the original. Locate the signed original or confirm a certified copy is available for filing.
• Check dates and limits. Note when it was signed, whether it is enduring, and any limits or conditions.
• Check the will. Ask whether the property is the subject of a specific gift.
• Keep records. Section 19 requires the attorney to keep prescribed records, so keep a clear record of the sale and where the proceeds went.

Selling or buying for someone else? Check the paperwork before you list

Our real estate lawyers can review the power of attorney, confirm what the land title office will need, and handle the conveyance so the attorney's role and duties are dealt with properly.

Call 604-259-2844 or send us a message to arrange a consultation at our Vancouver office.