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Can Power of Attorney Sell Property Before Death in the UK?

Property Saviour » Inherited Property » Can Power of Attorney Sell Property Before Death in the UK?

You can sell a property using the Power of Attorney before death in the UK.

Imagine this scenario: Your elderly parent or loved one can no longer manage their affairs, and you’ve been granted power of attorney to act on their behalf. The question arises: Can you sell their property while they’re still alive?

If the POA document explicitly grants the authority to sell property, the attorney can legally sell the principal’s property before their death.  However, the attorney must act in the donor’s best interests and follow any instructions or limitations outlined in the POA.

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Can Power of Attorney Sell Property Before Death in the UK?

In the UK, a Power of Attorney (POA) can grant legal authority to an appointed person, known as the attorney, to act on behalf of the donor (the person granting the POA) in various matters, including selling the property if they become mentally incapacitated or unable to make decisions for themselves.

 

Understanding Power of Attorney (POA) in Depth

There are two main types of POA:

 

Lasting Power of Attorney (LPA)

An LPA allows the donor to appoint an attorney to manage their property and financial affairs if they lose mental capacity.  To be valid for property transactions, the LPA must be registered with the Office of the Public GuardianAn LPA is a more comprehensive and long-lasting arrangement that remains valid even if the donor loses mental capacity.

There are two types of LPAs:

  • Property and Financial Affairs LPA: The attorney can decide about the donor’s property, finances, and money.
  • Health and Welfare LPA: This LPA allows the attorney to make decisions about the donor’s health and personal welfare.

 

Enduring Power of Attorney

Enduring Powers of Attorney (EPAs) were legal documents that authorised someone to manage another’s property and financial decisions before Lasting Powers of Attorney (LPAs) were introduced in 2007. While it is no longer possible to create a new EPA, existing EPAs remain valid and can still be used.

 

Ordinary Power of Attorney (OPA)

An OPA is a temporary arrangement that allows the attorney to make decisions on the donor’s behalf while the donor still has mental capacity.  It becomes invalid if the donor loses mental capacity.

 

Authority to Sell Property

If the Power of Attorney (POA) document specifically allows it, the attorney can legally sell the principal’s property before they pass away. Nonetheless, the attorney is required to act in the best interests of the principal and adhere to any directives or restrictions specified in the POA.

 

Best Practices

It’s important to note that an LPA must be registered with the Office of the Public Guardian (OPG) before it can be used. This process ensures that the donor has the mental capacity to understand the implications of granting an LPA.

Remember, a POA is only valid until your loved one is still alive, and you will need a Will and apply for a Grant of Probate if they pass away.


Real-Life Example

A visitor on our website recently shared their experience of selling their mother’s property using a Property and Financial Affairs LPA. They faced challenges when their sibling contested the sale, claiming it wasn’t in their mother’s best interests. The siblings argued that their mother’s wish was to keep the property in the family, and selling it would go against her desires.

After a lengthy legal battle and providing evidence that the sale was necessary to fund their mother’s care, the sale went through. However, the process was emotionally draining and costly, highlighting the importance of clear communication and documentation when selling property with an LPA.

Had they considered selling to a company like Property Saviour, they could have avoided the family dispute and expedited the sale process, ensuring a fair price and a smooth transaction.

Can a POA Sell Property?

An OPA cannot sell property, as it becomes invalid if the donor loses mental capacity.  However, a Property and Financial Affairs LPA can sell property on behalf of the donor even after the donor has lost mental capacity.

Can power of attorney sell property before death in UK
The attorney must act in the donor's best interests.

Limitations and Requirements

Certain limitations and requirements may apply when selling property under a POA:

  1. Type of Property: The POA may specify the types of property that can or cannot be sold.
  2. Time Limitations: There could be time frames within which the property must be sold.
  3. Financial Limitations: Caps on the amount of money that can be handled or received from the sale.
  4. Judicial Approval: In some cases, the sale may require judicial approval, especially if there are specific limitations in the POA.
  5. Co-ownership and Trustees: If the attorney co-owns the property with the principal, a second trustee may need to be appointed to handle the sale proceeds.

 

Acting in the Principal’s Best Interests

Regardless of the POA’s terms, the attorney must always act in the principal’s best interests when selling the property.  This includes considering the principal’s financial needs, living arrangements, and overall welfare.

By understanding the legal framework surrounding POAs and property sales in the UK, attorneys can ensure they fulfil their responsibilities and comply with the relevant laws and regulations.

Conditions for Selling Property with an LPA

  • The attorney must act in the donor’s best interests.
  • The LPA must be registered with the Office of the Public Guardian (OPG).
  • The attorney must follow the Mental Capacity Act 2005 code of practice.
  • The attorney should keep detailed records of all decisions and transactions.
  • If the attorney is the only one appointed and co-owns the property with the donor, a second ‘trustee’ may need to be appointed to receive the sale proceeds.

Potential Challenges

  • Family disputes over the sale of the property.
  • Concerns about the attorney’s motives or actions.
  • Difficulties in obtaining the necessary documentation or approvals.
  • Ensuring the sale is in the donor’s best interests, especially if they lack mental capacity.

Seeking Professional Advice

It’s recommended to seek legal advice from a solicitor or professional advisor when selling property with an LPA.

They can ensure that all legal requirements are met and guide you through the process.

Selling Property After the Donor's Death

  • An LPA becomes invalid upon the donor’s death.
  • To sell the property after the donor’s death, the executor or administrator must obtain a Grant of Probate or Letters of Administration, respectively.
  • The process involves valuing the estate, paying any inheritance tax due, and obtaining the necessary legal authority to sell the property.

Limitations of a POA

A POA cannot change the donor’s will or override their wishes regarding the distribution of their estate.  The attorney must act in the donor’s best interests and cannot make decisions that benefit themselves or others over the donor.

Comparing Different Ways to Sell

Attorneys often approach us after trying an estate agent or auctioneer unsuccessfully. 

In this table, we have compared different ways to sell so that you can make an informed decision:

Method

Pros

Cons

Estate Agents

You are likely to achieve close to market value.

Best way to sell if you aren’t in a rush.

Extensive timeframe

Problematic property resulting in abortive sales

The quality of agents can vary

 

Auction

Quicker than an estate agent

If property sells, contracts are exchanged quickly

More certainty than estate agent sale

Upfront entry fees

Paying for legal fees

Delay of up to 3 months

Complex types of auctions

A low guide price means a degree of risk

Property Saviour

Fast, hassle-free sale

No fees to pay

Expertise in handling complex situations

Completion in days

You won’t get the full market as we will be looking to make a small profit margin of 20% before our costs

Sell to Property Saviour for a Seamless Experience

If you are an attorney thinking of selling a property, contact us.  We are experts at handling complex situations.  We are sympathetic and here to support you.  

Sell with certainty & speed

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