Protecting overseas property purchase with Power of Attorney

After the UK experiencing two lockdowns, and Brexit now complete, the increase in problems regarding overseas assets and properties have seen a much greater increase.

Individuals must be aware of the importance of setting up a Power of attorney, and in case of any problems that arising – knowing that professional help is on hand if needed.

In most cases, it would not be wise to think that having a UK based power of attorney would be enough cover. Most countries will want to use their own specific legal documents and power of attorney.

The standard process of purchasing overseas property is to have all deeds and documentation signed by both parties, witnessed by a Notary Public. Both parties will often have different Notary Publics, which makes traveling for meetings/engagements even more trying in the age of COVID-19.

Planning ahead

With these two main factors in mind, it is important to plan when thinking about any potential property investment overseas.

Many companies abroad that sell property will use their own specific Power of Attorney documentation. And although this is usually standard practice, some companies may be looking out for their own interests first. So, it is advised that you seek the services of a local solicitor to draft the Power of Attorney, to ensure your best interests are kept as the number one priority.

When the Power of Attorney is being drafted, it is are to have a termination date as you may have to create a new POA if there are any delays. There is also no need to have an option to cancel as, by law, this option is always present.

Because of the logistical complications that Covid-19 brings, it may not be possible for you to travel to the designated country, meaning the appointed attorney will have to act on your behalf.

The Attorney that has been granted the power to act on your behalf will have such responsibilities such as court representation, sign deeds or to make any necessary payments.  Therefore, is important to choose your attorney very carefully.

Most European Power of Attorneys have many wide-ranging clauses and is a process much designed for your benefit. This can eliminate the need to come back to you later if something has been left out, or if you need to re-sign any documentation.

However, you do not want the power to be too large and cover any non-compulsory conditions. Therefore, is it advisable that you have the document drawn up before you originally sign, and by an expert professional.

Setting up a Power of Attorney UK vs abroad

In the UK, the process is usually rather straightforward. The document needs to be set up by the donor (the person whose assets and finances it covers). This is normally done through the individual’s solicitor. This will then have to be signed by the attorney and witnessed by a family friend as well as the solicitor.

When setting up abroad, this process will differ slightly as the local Notary will sign all the documentation as a witness to the person signing. It is advised that you have different notary’s in different jurisdictions if you own multiple properties. The standard duration of setting up a power of attorney abroad is 1 year. This can be altered if you are more comfortable with your situation but is not recommended with the fast-changing pace of Covid-19.

Variations of Power of Attorney in different locations

There are many different terms and phrases used in European countries for power of attorney. In France this is called the “procuration”. This gives a Third party the power to act on your behalf (a public Notary/’Notaire’) to carry out the sale agreement, purchase, and all final deeds.

Power of Attorney in France

The French powers can be used in the UK going forward, but these need to be ‘internationally valid’ which needs to be certified by the foreign office by a document called an ‘apostille’. With various restrictions in France due to Covid-19, many people are now choosing to set up a procuration in order to purchase property without having to travel overseas.

Power of Attorney in Italy

This can also be said for people wanting to purchase property in Italy. By using the Power of attorney, (‘procura speciale’) it is not required for buyers and vendors to be present for the buying process. There are two main avenues you can go down to obtain the power of attorney. The Italian general consulate of London, or by special power of attorney that is set up by a UK notary and is authorized by the foreign office with an apostille.

This will give the individual power to give the proxy capacity to act for the buyer and vendor in Italy, as well as sign any documents that are required, witnessed by the Italian notary. This will then be drafted in both English and Italian.

Power of Attorney in Spain

A power of attorney in Spain ‘Escritura de Poder’ or ‘Poder Notarial’ has many similarities to its Italian counterpart. If you are able to travel to Spain, a Power of Attorney is obtained with a meeting between you and a Spanish Notary. This is the fastest and cheapest way of obtaining a POA, however, keep in mind this will be solely written in Spanish, so translation might be needed later.

If unable to travel overseas the power of attorney can be set up using a UK Notary and a Spanish solicitor. An English copy will be sent over, which the Notary can then witness you signing all the relevant documentation. Once you have signed the documents, the process involves sending the Power of attorney to the foreign office, along with a request for an apostille to be attached. Once the document has be legalised, it can then be used for its purpose in Spain.

Power of Attorneys are a great way of purchasing property and making important financial transactions when the party cannot travel/ be present. When creating a power of attorney, it might be advisable to set it up for a limited period of time (around 12 months) and the person that the power is given must be credible.