Is the usage of power of attorney in land transaction still relevant in 2021?
In Nigeria,it is very common,to see land owned by family,community or a clan,in such occasion how do one transact with the family/community or clan?
The fear of running into a land scam,is the beginning of caution and due diligence.
in this case,it becomes necessary in finding out the identity of the true owner of a property you are interested in acquiring or renting .
in some cases where the property is owned by a single individual,who has a complete ownership over the property,but somehow is not physically present,or medically incapable of doing the transfer of ownership,what becomes the solution?
This brings us to the necessity and use of power of attorney in real estate transaction in Nigeria.
in this article two descriptive terms shall be used,a donor and a donee,a donor is the giver of the power,he could be the property owner,family head,community head? a relation to the owner of the property does not have power to appoint someone else to become an attorney in a property belonging to his brother/sister.
it is very common that one cannot give what he does not have,in the event of a transaction,the donor must be the owner,for if one place something on nothing,how can it stand? so the need to find out if the attorney received his power from the owner of the property if its a private property,if its a community/family property,the person receiving the power should be the head of the community/head of the family,after due appointment by the principal members of the family or community leaders representing a segment of interest.
A donee is the receiver of such power,a power of attorney could be revocable or irrevocable,it could be coupled with an interest or giving without consideration.
A power of attorney according to blacks law dictionary is defined as an instrument granting someone authority to act as agent or attorney-in-fact for the grantor. (See black’s law dictionary, 9th ed. P.1290).
It is an acceptable practice for property owner,land owning families,clans or communities to donate a power of attorney to a person,this can be a member of the family(head of the family)a letter of instruction will also be acceptable, for the single purpose of selling their lands to the public. Sometimes, It might be that an owner of a property who reside abroad wants to sell his or her property in Nigeria but cannot return to Nigeria,or a Nigerian residing abroad and want to acquire a property in Nigeria. in this case power of attorney will do the magic.
It may also be that the owner of the property is very ill and is not in a position to engage in the transaction to sell his property,so long the illness doesn’t affect his/her mental state to understanding that he is selling off his property, the owner can donate a power of attorney to someone to act for him.
in that case the transaction will not be marred with the predicament of selling the property of a person,who doesn’t know that the property is being sold,ignorance of such transaction can be a good ground to vitiate a transaction.
it is necessary to note,that for a transfer of a property to be duly recognised in law,it must be by a deed,all transactions for the transfer of legal and equitable interest of a real estate must be by a deed.
so the necessity to back the power of attorney appointing the attorney by a deed.,note that this will only apply where the owner is not going to be either signing as purchaser/buyer but will have his duly appointed attorney execute the transaction on his behalf,so the law deems that whatever the attorney/agent duly appointed by deed,is doing is what the real owner agrees to and therefore the transaction is good.
Where an owner of a property gives a power of attorney to an attorney to sell his property and execute a deed of assignment in favor of a purchaser, such power of attorney shall be made by deed. See Abina V. Farhat (1938) 14 NLR 17.
situations where power of attorney is necessary are :
A power of attorney is neccessary in real estate management,to wit: power to estate manager to let in new tenants,collect rents,issue quit notice on behalf of the landlord,pay bills,collect rates,most times power of attorney is necessary in real estate marketing and agency as well.
in this case where the donor of the power of attorney is given for a valuable consideration it must be expressed to be irrevocable (the power cannot be withdrawn/revoked by the donor of such power,giving that power because he has received money or moneys worth.
A power of attorney coupled with interest and given for a valuable consideration is irrevocable until the benefit for which it is conferred has been realized,in this case it is the agreement between the parties that will decide,for example a man gives donee power of attorney to use his land to achieve a specific project,for a consideration,such power shall only be revoked upon the donee realising such project as agreed by the parties.
where A purchaser relies on power of attorney coupled with an interest,such purchaser will not be affected by any act of the donor or his death. See s.8 of the Conveyancing act, 1881, s.143 (1)(i) property & Conveyancing Law, western Nigeria, 1959.
Where the power is not for value, it should be expressed to be irrevocable for a fixed term not exceeding one year and a purchaser dealing with the donee of the power even if the donor is dead, under disability or bankrupt to the donee’s knowledge is protected by law. (See s.9 Conveyancing Act and s.144(1) of Property & Conveyancing Law).
A power of attorney requiring the donee to execute a deed of assignment in favor of a purchaser should be registered at the lands registry and duly stamped.
in actual practice failure to duly stamp and register the power of attorney leaves the entire power worthless. A power of attorney shall ony be signed by the donor/giver of the power,and the instructions inherent in the power can be a futuristic or past task,in this case the donor is ratifying the actions carried out by his attorney in the past date.
Therefore a power of attorney is only registrable where it specifically relates to interest in land. For example where a power of attorney provides that the donee of the power can enter into any arrangement with any person or persons concerning the donor’s land including sale or disposition of the said land and that in the event of such sale or disposition, the Deed of Assignment shall be executed by the donee, such power of attorney is a registrable instrument.
But a power attorney which merely requires the donee to manage a property, collect rent or issue statutory notices to tenants is not a registrable instrument since the exercise of the power does not relate to or affect any interest in land,however to complement your power of attorney,ask the donor for a letter of instruction/authority to act,if in any event in court,the power of attorney is set aside,the letter of authority/instruction can show that the attorney was acting within powers allocated by the owner.