Buying or selling a Home Under a Power of Attorney - All you need to know

Usually it is a parent. Sometimes a husband or wife. Now and then it is someone who has moved abroad and simply cannot be here to sign.

Whoever it is, you are about to sell or buy a home on another person's behalf, and your conveyancer is going to ask you more questions than you expected. Some will feel a little personal. One or two may even feel as though you are being doubted.

You are not. Or rather, it is not really about you at all. It is about the person whose home it is, who may not be in a position to speak up if something goes wrong, and it is about you too, because those same questions are what protect you if anyone ever asks what happened later.

If you take one thing from this article, let it be this, tell your conveyancer about the power of attorney on the very first call. Not at the memorandum of sale stage. Not when the contract arrives. The first call.

Whose home is it, anyway?

The person who owns it. That sounds too obvious to say, but it shapes everything that follows.

In legal terms they are the donor, and you are the attorney. You give the instructions. You sign. You will probably do all the running around. However your conveyancer's client is the donor, and every decision has to be made in their interests, which is why the client care letter will be addressed to them and not to you. People are sometimes a bit thrown by that. It is just how it works.

Is it the right kind of power?

This catches out more people than you would think.

A lasting power of attorney for property and financial affairs will do the job, once it has been registered with the Office of the Public Guardian. Read the wording, though. Some are written so that they can only be used after the donor has lost capacity, and if that is yours and the donor is still perfectly able, it cannot be used yet.

A lasting power for health and welfare is no use at all for a house sale. However much it feels as though it ought to be.

An older enduring power, made before October 2007, can still be used, but it has to be registered once the donor's capacity is going.

Then there is the general power of attorney, and this is the real trap. It works perfectly well while the donor has capacity. The moment they lose it, the power stops. Which, when you think about it, is exactly the point at which most families reach for it.

If there is no valid power and the donor can no longer decide for themselves, the only route is an application to the Court of Protection for someone to be appointed as deputy. That takes months. Not weeks, months. So please, sort it out before the estate agent comes round to value the house.

What to dig out before you call

The original power of attorney, first of all. Not a photocopy that has been sitting in a kitchen drawer. Your conveyancer needs to see the original and certify a copy, and every single page of that copy has to be certified.

If the power was registered on or after 1 September 2019, you can also create an access code through the Office of the Public Guardian's online service. It lets your conveyancer check, there and then, that the power is registered and still in force. It takes a few minutes and it saves a surprising amount of back and forth.

Identity documents next, for you and for any other attorney. Joint attorneys all have to sign, so everyone will be checked. The donor's identity is checked as well, because the donor is the client. If they are in a care home, or their passport expired years ago, say so early and your conveyancer will find a way round it.

Further, the donor's bank details. Their account, in their name. More on why in a moment.

The capacity conversation

This is the part people find hardest, I think, and it is worth pausing for.

Your conveyancer will ask whether the person whose home it is can still make their own decisions about selling it. Then they will ask how you know. Not because they think you are wrong, but because the honest answer to that second question tells them a great deal. A diagnosis is one thing. A move into residential care is another. "Mum has been a bit forgetful lately" is something else again, and all of them lead in slightly different directions.

If the donor still has capacity, expect a gentle question about why they are not simply signing the documents themselves. Sometimes there is a perfectly good reason. They are abroad, or frail, or they just find the whole process overwhelming. But if they can sign, often the simplest thing is for them to do so.

Whatever the reason, your conveyancer will want to speak to the donor directly. On their own, ideally, and by video if possible. They may well open the call by asking whether anyone else is in the room. Please do not take that personally. It is a question asked in every case, precisely so that it never has to be asked of anyone in particular.

If the donor has lost capacity, the questions shift. You must act in their best interests, and involve them as far as you can, even now. So you will be asked how the decision to sell was reached, and who else was consulted. And if the donor has been living in the house, where they will be living afterwards.

The money

Short section, this one.

The sale money belongs to the donor. It goes into an account in the donor's name. Not yours. Not anyone else's, however sensible the reason sounds at the time.

That rule protects the donor, obviously. It protects you just as much, because it means no one can later suggest the money went astray. Your conveyancer will check the bank details independently and confirm them again before completion. And if you ever receive an email telling you the bank details have changed, stop. Pick up the phone. Fraudsters know exactly when completion money moves.

"Can I just buy the house myself?"

It is a natural question. You know the house, you may have grown up in it, and buying it yourself feels tidier than selling to strangers.

The short answer is no, not without the permission of the Court of Protection. It does not matter how fair the price is. An attorney buying from the person they act for is exactly the kind of arrangement the law treats with suspicion, even when everyone involved has the best of intentions.

Selling to a brother, a cousin, a family friend? That can be done. But expect to show that the price is the full market value, usually with an estate agent's valuation. A discount for family counts as a gift, and an attorney's power to make gifts is very narrow indeed. Mention any family connection at the start. It is far easier to deal with then than to discover halfway through.

Two things that tend to surprise people

The first is joint ownership. Say you and your wife own the house together, and you hold a power of attorney for her. You might reasonably assume you can sign for both of you and be done. You cannot. The law says the sale money must be received by at least two people, and one person signing twice, once as owner and once as attorney, does not count as two. Someone else will need to be appointed to join in the sale. It is not difficult to arrange. It just needs to happen early, not the week before completion.

The second is other people living in the house. Perhaps a son or daughter moved in to help with care, and never quite moved out again. Any adult living there, usually anyone aged 17 or over, will need to sign a form agreeing to leave by completion. The buyer will not exchange without it, and that can be a delicate conversation to have, so it is better had sooner.

The forms

You will not know when the boiler was last serviced. You may have no idea whether there was ever a dispute with next door about the fence.

That is fine. Say so.

The property information forms are what the buyer relies on, and a confident guess that turns out to be wrong can come back as a claim against the donor long after completion. Answer what you actually know. Leave the rest as unknown. Your conveyancer can make clear in the forms that the replies are yours, given to the best of your knowledge. And if the donor is able to help, sit down with them and go through it together. They will remember things you never knew.

And if you are buying?

Much of the above still applies. A few extra points, though.

The purchase has to be in the donor's best interests. A move to somewhere smaller, or to a retirement property closer to family, is the usual picture. The home is bought in the donor's name, with the donor's money, and your conveyancer is required to check where that money has come from. So expect to produce bank statements tracing it through the donor's own accounts, probably more than you think necessary.

If there is a mortgage involved, tell the lender straight away that an attorney is acting. Lenders have their own rules on this and not all of them will lend on that basis. Better to find out now.

Stamp Duty Land Tax is worked out on the donor's circumstances, not yours. Whether the higher rates apply, for example, depends on what the donor owns.

One more. If you are thinking of owning the new home jointly with the donor, or living in it yourself, raise that right at the beginning. There is nothing necessarily wrong with it. But anything that benefits the attorney needs careful handling, and it is much better done openly from the start.

When things change halfway through

Nobody likes to think about this, but a power of attorney can end in the middle of a transaction.

The obvious one is the death of the donor. The power ends at that moment, not at the end of the month, not after the funeral. From then on nothing can exchange or complete until the executors have a grant of probate, and the whole thing effectively starts again in their hands.

There are quieter ways for it to end as well. The bankruptcy of the donor or of the attorney. A divorce, if the attorney is the donor's husband or wife. Another attorney dying, or losing capacity themselves, or deciding they no longer want to act. And of course the donor's health can change, which may alter whether the power can be used at all.

If any of that happens, tell your conveyancer straight away. You will also be asked to confirm in writing, before exchange and again before completion, that nothing has changed. It will feel repetitive. It is meant to.

So, before you pick up the phone

Find the original power and check it is the right kind. Create the access code if you can. Gather identity documents for everyone, the donor included, and have the donor's bank details to hand. Think about how you would describe the donor's capacity, and what that view is really based on.

Then jot down anything awkward. A buyer in the family. A house you own together. Someone still living there who is not quite ready to go.

None of this is complicated on its own. What causes delay, in my experience, is nearly always something that was known at the very start and only mentioned near the end. So mention it at the start.