When a legal issue is encountered in a foreign jurisdiction, you will often hear talk of a Power of Attorney. In reality this is nothing to be afraid of. A Power of Attorney is simply a document which grants the ability to somebody else to do something on your behalf. This could be, for example, to buy a property in Spain, inherit a property in Portugal or commence a court case in Cyprus. In fact any issue for which you may need legal representation.
The person appointed under the Power of Attorney will then use the Power wherever required (in a Notary, a Court, a bank etc.) and will be required to present it to that entity in order to confirm they are legally acting on your behalf.
Because a Power of Attorney allows somebody to legally act on your behalf, usually on a variety of important issues, you should only grant a Power of Attorney to somebody that you trust; such as your lawyer, a family member or a friend. It is worth emphasising that the person appointed under the Power will be able to act as if they are you and therefore this can leave you open to problems should that appointed individual choose to abuse that Power.
We are presently addressing large numbers of legal actions before the courts in Cyprus in relation to, amongst others, issues which have arisen as a result of how powers of attorney were used to enter individuals into foreign currency housing loans taken out for the purchase of immovable properties in Cyprus.
A Power of Attorney is generally drafted up by your lawyer or solicitor and dependent on the legal issue you are often then – when necessary - advised to take the Power of Attorney to a Notary Public. You will proceed to sign the Power of Attorney in front of the Notary who will make sure via your identification documents (normally passport) that you are indeed who you say you are, that you and what you are signing and the powers or faculties you are granting and, importantly, that you are aren’t being pressured into signing it.
Once the Power of Attorney has been signed – and again dependent on the legal issue - it may need to be sent to the Foreign, Commonwealth and Development Office for legalisation. Once the FCDO has completed their formalities then the power of attorney can be sent to the appropriate person to use abroad.
Often Powers of Attorney which are to be used abroad can be very general in nature and in terms of what somebody is legally permitted to do on your behalf. In Spain for example it is not uncommon for powers of attorney to include a wide variety of clauses which may not necessarily be needed at the time. The reason for the broad scale of the power is due to the fact some Notaries in Spain will refuse to accept a Power unless it contains such clauses, but also it avoids having to put into place another Power of Attorney should the original case or legal issue move in a slightly different direction.
As an example, should you grant a Power of Attorney just to buy a property in Spain but later on decide that you want the solicitor acting for you to obtain an NIE for you, but these particular clauses are not included in the original Power of Attorney, then the lawyer will not be able to carry out these additional tasks without a new Power of Attorney.
This sort of complication of course will take time and incur unnecessary additional expenses. Equally you should only agree to clauses that you are happy with and fully understand and if in any doubt you should speak to your lawyer or solicitor about clauses you are unsure of; and understand clearly why they are included.
A question we are also often asked is – Can a time limit be imposed on a Power of Attorney? It is possible to build in an expiry date for a Power of Attorney but this does come with certain risks. If, for example, you put an expiry date for a Power of Attorney when buying a property in Portugal, then if the signature cannot take place within a stipulated or agreed time frame for some reason, then a new Power of Attorney will have to be issued to sign the relevant title deeds.
Revoking a Power of Attorney, on the other hand, can be a relatively easy procedure.
In theory all that is required is to inform the person appointed under the Power of Attorney that the Power has been revoked. In an ideal world the person appointed under the Power of Attorney would at that stage return the original Power of Attorney to you and cease immediately from acting under its provisions.
If the person appointed under the Power of Attorney refuses however to hand this back to you or you have doubts as to whether they will in fact stop using it, then you may need to send a more formal notification to them.
In Spain, for example, such a notification is sent either by a lawyer (Abogado) using a form of legal notification called a Burofax or via a Notary (Notario).
In the UK we often come in contact with Lasting Powers of Attorney and, before that, Enduring Powers of Attorney. These are designed so that appointed people can run the affairs of an individual should they lose mental capacity. Unfortunately in many countries they don’t have a similar concept to Lasting Powers of Attorney and therefore if you lose mental capacity then your Power of Attorney will also cease to have effect. It is possible to use a British Lasting Power of Attorney in, for example, Spain but this is complicated and requires an explanation to the authorities in Spain as to how Lasting Powers of Attorney work and may even require the authority of a Court in Spain.
If you would like to know more about Powers of Attorney for use abroad, whether it is to buy or sell a property, deal with an inheritance, start litigation or anything else involving foreign law then you can contact our internationallegal team
Disclaimer – International legal issues are a complex area of law and this information is no substitute for independent legal advice on an individual basis taking into consideration your personal circumstances and legal requirements. This information is provided to provide general information only and was correct at the time of publishing. The legal position in relation to international transactions can change frequently and this page may not have been updated following any changes in the law. You should therefore not rely on this information and should seek legal advice in relation to your personal circumstances.