Power of Attorney: Selling Property as Someone's Attorney

A ‘lasting power of attorney’ (LPA) is a legal document that appoints a person or persons as the main decision maker for someone who has lost mental capacity and can no longer make their own decisions for themselves. There are two types of LPA you can make, either a property and financial affairs LPA, a health and welfare LPA, or both. The person who creates the LPA is called the 'donor', while the person who acts on their behalf is their attorney.

There are a number of specific considerations for attorneys who are responsible for managing property, including a need to seek a professional valuation and consider the market value of the property to show that you are acting in the best interests of the property's owner. Here, the experienced LPA solicitors at Percy Hughes & Roberts offer some top tips on selling a property as someone else's attorney, and discuss when to seek legal support.

Starting the process

As we have noted, if you are selling a house as an attorney for someone it is important to check which kind of Power of Attorney you have.

To act on the sale of a property you have to have been appointed in a Property and Financial Affairs LPA, which has to be registered to be valid. 

Making sure that you have a property and financial LPA in place, that it has been properly registered, and that you are empowered to act on behalf of the donor, are the first steps to take to legally sell the donor's property on their behalf. If the person has an LPA, you must ensure it concerns Property and Financial Affairs rather than Health and Welfare decisions - otherwise, you will not be empowered to sell property, access bank accounts or manage finances. 

In some cases, the donor may have an Enduring Power of Attorney (EPA) rather than an LPA. These were in common use before October 2007, when they were replaced by LPA deeds. EPAs can still be used if they were made and signed on or before 30th September 2007, and they cover the property and financial affairs of the person who made it.

Check the Power of Attorney Deed is Registered

If you are an attorney under an LPA, the document must be registered with the Office of the Public Guardian for it to be considered valid. It can take up to 20 weeks for an LPA to be registered, and this must be done before any decisions can be made on the donor's behalf.

If you intend to sell the donor’s house it is advisable to start the registration process well before a prospective buyer is found. You may lose a buyer or delay a sale if the LPA is not registered in time. A Property and Financial Affairs LPA will not be legally valid until it has been registered at the Office of the Public Guardian, even if the donor still has the mental capacity to deal with their own money or property, so it is important to take this step at the first opportunity.

Check whether there are any restrictions in the LPA

When the donor made the LPA, they may have placed restrictions in it. For instance, many donors specify that an LPA is not to be effective (even if it has been registered) until a medical practitioner certifies that the donor is incapable of dealing with their financial affairs due to a lack of mental capacity.

Another potential restriction that donors may impose is to limit the use of the LPA to the operation of their bank accounts only, which would mean that the LPA/EPA does not provide the attorney with the power to sell the property.

It is important to check whether any such restrictions exist, although they will not necessarily prevent the sale of the person's house. If this is the case, you need to obtain the consent of the Court of Protection before you can sell the donor’s house, but this can potentially be achieved if the donor has lost their mental capacity.

Check the Donor’s Will before Clearing the Donor’s House

As an attorney, you have no automatic legal right to see a copy of the donor’s will. If the donor has previously made a copy available to you, or the LPA gives you specific authority to obtain a copy of the donor’s will, check the document before making any decisions about clearing the house. You may face legal consequences if you sell or give away something that is in the house that has been left to someone else in the donor’s will. If you cannot access the will, you may need to keep all of the person's possessions safely in storage until they die, at which point the will becomes a public document and you will know how to dispose of particular items.

Notify the property insurance providers, council and utility companies

If the property is permanently unoccupied, you must advise the buildings and contents insurance providers as soon as possible. If a claim arises (for example, if a break-in occurs, or burst water pipe causes damage) and the insurance provider was not notified that the property was unoccupied, it may refuse to pay out under the terms of the policy.

Send a certified copy of the LPA/EPA and ask them to send all correspondence relating to the insurance policy to you. After notifying the insurers, check any amended policy you receive. If a property is unoccupied, it is usually a term of the policy that the property is inspected by you on a regular basis, sometimes up to once a week.

Make sure that you comply with the insurer’s requirements about protecting the property over the winter months. Insurers usually make it a term of the policy that the water system is drained, or that the heating is left to come on at intervals to prevent pipes from bursting.

If the person you are an attorney for moves into a nursing home as a permanent resident, they become exempt from paying Council Tax on their property. Likewise, some utility companies no longer charge water rates if a property has become unoccupied because the owner has moved into a nursing home permanently, so it can be useful to let them know as soon as possible.

Arrange postal redirection with Royal Mail

As an attorney, you can arrange for the donor’s mail to be redirected to you. This may be beneficial if you live some distance from the attorney’s property or you can only make infrequent visits to collect the Donor’s mail. You can pick up a form from any Post Office or apply online.

There is a fee payable but this can be reimbursed from the donor’s funds as an attorney expense. Keep any receipts as a record, as the Office of the Public Guardian may call upon you to produce an account of all payments made on behalf of the donor.

Seek professional advice

Attorneys have a duty under the Mental Capacity Act 2005 to act in the best interests of the donor. This means obtaining the best deal possible for the sale of the property. It is advisable to obtain three written market appraisals of the property from local estate agents and opt for the middle value, as this will usually be a realistic and fair market price for the property. Obtain the written advice of the agent when you receive an offer.

Before investing the proceeds of the sale of the property, you should seek the opinion of at least one independent financial adviser. ‘Which’ magazine provides tips on finding a good financial adviser.