What do I need to be aware of when signing a Power of Attorney when purchasing a Pre-Construction Condo?
A Power of Attorney (POA) is a legal document which allows a person to authorize someone he trusts (the “attorney”) to make decisions, sign documents and perform acts on the person’s behalf.
The POA is a very convenient tool for parties who will be unable to personally sign the documents in the course of the transaction. However, as POAs are a way of transferring one’s authority to act to another, there is always the possibility of mistake and abuse where the attorney performs other acts other than those it was originally intended for. In worst cases, POAs have been used for fraud.
In a purchase funded by a mortgage lender, the mortgage lender will typically require that it pre-approves the use of a POA. Bear in mind that most lenders will not permit the execution of mortgage documents under a POA.
Where the purchase is also insured by a title insurer, the purchaser’s lawyer must also ensure that the title insurer will allow the use of a POA.
This question was answered by Shaffiq Dar (Real Estate Lawyer)
