A power of attorney is one of those legal documents that most people understand in a general way but do not think about concretely until they need it. In the context of real estate, particularly for senior sellers in Nova Scotia, understanding how a power of attorney works before you need it can save a significant amount of time, money, and stress.
What a Power of Attorney Is
A power of attorney is a legal document that authorizes another person, called the attorney, to act on your behalf in legal and financial matters. The person granting the authority is called the donor or grantor. A power of attorney can be broad in scope, covering all financial decisions, or it can be limited to a specific transaction, such as the sale of a particular property.
How It Applies to Real Estate Transactions
In a Nova Scotia real estate transaction, all owners of a property must sign the relevant legal documents. If an owner is unable to be present to sign, whether due to health, travel, or any other reason, a properly executed power of attorney allows their designated attorney to sign on their behalf.
This comes up more frequently in senior real estate transactions than in any other context. A seller who has a health episode during the transaction, a couple where one spouse is hospitalized, or a situation where one owner is cognitively unable to sign: all of these require a power of attorney to be in place before the transaction can proceed.
The Enduring Power of Attorney
A standard power of attorney becomes void if the grantor loses mental capacity. An enduring power of attorney, sometimes called a continuing power of attorney, remains valid even if the grantor becomes mentally incapacitated. For seniors, this distinction is critical.
In Nova Scotia, an enduring power of attorney must be executed in a specific way to be valid. It must be in writing, signed by the grantor, and witnessed properly. Working with a lawyer to draft an enduring power of attorney ensures it meets the legal requirements and will be accepted in a transaction.
Do Not Wait Until You Need It
A power of attorney can only be granted by a person who has the mental capacity to understand what they are signing. If someone has already been diagnosed with a condition that affects their capacity, or is in the advanced stages of a cognitive illness, it may be too late to create a valid power of attorney. The time to put this document in place is before it is needed.
What Happens Without One
If a property owner becomes incapacitated and no power of attorney exists, a family member may need to apply to the Nova Scotia court system for guardianship in order to complete a real estate transaction. This process is time-consuming, expensive, and can significantly delay or derail a sale.
I work closely with real estate lawyers across Halifax who can help ensure your legal documents are in order before a transaction begins. Call me at 902-497-3031 to discuss your situation or get a referral.
