WHAT ARE THE ESSENTIAL FORMALITIES OF POWER OF ATTORNEY

Power of Attorney (POA) can be granted by individuals and Corporations to an agent to perform functions, such as instituting an action in court, managing property, signing documents or receiving rents etc.

8/16/20223 min read

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WHAT ARE THE ESSENTIAL FORMALITIES OF POWER OF ATTORNEY?

Power of Attorney is a document or instrument,which is usually but not always necessarily under seal whereby a person (donor) authorizes another person (the donee) who is called his attorney to act in the stead of the donor anything which the donor can lawfully do as spelt out in the power of attorney. In other words, is a formal legal instrument by which a person called the donor appoints the donee to perform certain lawful acts on behalf of the donor. UDE V NWARA

PARTIES TO POWER OF ATTORNEY

Parties in a Power of Attorney are referred to as Donor/Principal (the party who donates power to another) and a Donee or Agent (the party whose power is donated to). Power of Attorney (POA) can be granted by individuals and Corporations to an agent to perform functions, such as instituting an action in court, managing property, signing documents or receiving rents etc.

MODE OF CREATION OF POWER OF ATTORNEY

The mode of creating a power of Attorney depends on the purpose of that Power of Attorney.Melwani v Five Star Limited

a) Where the power of Attorney has to do with land, it must be in writing - section 4 Statutes of Fraud 1677

.b) Where the donee is authorized to execute a deed, the instrument authorizing him must be a deed. Abina v Farhat(verbally); Powell v London & Provincial Bank.

FORM OF A POWER OF ATTORNEY

Usually, a Power of Attorney is made in a Deed poll (a Deed made by one party) EXCEPT in the following instances it is advisable to be made in Deed Indenture (a Deed made by two or more parties):

  • When it imposes some obligations on the Donee

  • It is important to have a record of the Donee’s signature to prevent fraud

  • It is supported by a consideration

  • It is coupled with an interest and so it is desirable to be signed by both parties

CHARACTERISTICS OF POWER OF ATTORNEY

The following are features of a Power of Attorney:

  • It is an instrument of delegation, authorisation or representation – Chime v. Chime.

  • Generally, it does not transfer interest in land or title to the Donee or Agent – Ude v. Nwara.

  • It is usually executed by the property owner (Donor/Principal) alone.

  • It is usually in writing but not necessarily by deed if the act to be performed by the agent is not required by law to be by deed – Abina v. Farhat. However, if the act is required to be done by deed, then the Power of Attorney itself must be by deed – Powell v. London and Provincial Bank.

  • Power of Attorney cannot be donated to a person who cannot sue and be sued.

  • Generally, the death of the principal or donor terminates the Power of Attorney.

TYPES OF POWER OF ATTORNEY

There are two (2) types of POA which are determined by the amount of power granted by the principal to an agent.

  • General Power of Attorney: this type of POA when created confers legal authority on another to take unlimited decisions of all activities of the Donor.

  • Specific Power of Attorney: this type of POA grants legal authority to an agent for specific matters. For example to sell a property, handle bank accounts or sign documents etc.

WHO CAN GIVE A POWER OF ATTORNEY FOR PROPERTY?

There are certain rules about who can give a Power of Attorney for Property, and who can be appointed as an attorney. To give a Power of Attorney for Property, you must:

  • be 18 years of age or older,

  • be mentally capable,

  • be aware of the property you own and its general value,

  • understand what it means to appoint an attorney,

  • know what authority you are giving your attorney.

Only legal persons can donate a POA or be appointed attorneys. See NATIONAL BANK OF NIG LTD v. KORBAN BROTHERS.

PARTICULARS OF INFORMATION REQUIRED TO DRAFT POWER OF ATTORNEY:

  • Particulars of the donor

  • Particulars of the donee

  • Particulars of the attesting witnesses

  • Particulars of the property involved

  • Purpose of the POA and the powers to be donated

  • Whether or not the POA is given for valuable consideration

  • Whether or not the POA shall be irrevocable

  • Duration/period of the irrevocability

  • Status of the donor

  • Extent and scope of powers donated

  • Where the power of attorney is to be used.

WHEN AND WHY DO I DONATE A POWER OF ATTORNEY?

Power of Attorney is very important in both commercial and real estate transactions. The following are reasons and instances when a POA is needed:

  • When you are very busy or unavoidably absent from the country

  • When you cannot effectively handle your affairs personally because of extreme old age.

  • Period of protracted or chronic sickness

  • When you have a vast estate or so many transactions to handle.

  • When expertise is required from professionals which you do not have.

  • POA affords you the opportunity to choose who takes care of your affairs rather than the court making such appointments.

Lastly, Power of attorney is a legal document which allows a person to authorise an attorney to act on is behalf.

NB: This article is not a legal advice, and under no circumstance should you take it as such. All information provided are for general purpose only. For information, please contact chamanlawfirm@gmail.com

WRITTEN BY: CHAMAN LAW FIRM TEAM

E-MAIL: chamanlawfirm@gmail.com

Tel: 08065553671, 08024230080