Power of Attorney for Sale (land plots & buildings)

Giving careful attention to details and clearly defining the boundaries of the powers granted in a power of attorney is paramount to prevent any misuse of authority. The power of attorney can be revoked by the principal at any time or may cease to be effective due to specific reasons outlined in the written document.

In certain situations, legal requirements dictate specific conditions regarding the content or format of the power of attorney. This is particularly applicable to transactions involving the disposal of a particular asset or right, where the power of attorney must be specialized (meaning the agent's right to act in a specific manner needs explicit mention, and the asset must be adequately identified). Similarly, for transactions concerning real estate, the granted power of attorney must be authentic to align with the form the contract will take.

There are various types of powers of attorney, depending on the extent of representation powers or the purpose and scope in which they are used, while their content may vary based on the specific needs of the principal. However, in general, a power of attorney specifies the powers and responsibilities granted to the agent, establishing limits of action and the duration of the authority.

Among the powers that the principal can grant through a power of attorney are:

• representation in the execution of common contracts, such as sale, lease, loan, pre-contracts or for the development of business collaborations. In principle, most contracts in the private sector allow parties to be represented by an agent designated through authorization.

management of bank accounts,

• in real estate transactions, powers of attorney can be used to enable an agent to sign documents and represent the principal in negotiations related to leasing office buildings for establishing a corporate headquarters, using commercial spaces, or conducting property-related operations such as appraisals, evaluations, cadastral work, or other matters.

• signing legal documents,

• business administration or making medical decisions on behalf of the principal,

• delegation of responsibilities - within a company or organization, powers of attorney can be used to delegate certain responsibilities and powers to team members or other authorized individuals.

Is it possible for an individual to execute a contract in various capacities? Indeed, it is, but this scenario is not without its risks. The most frequent instances include (i) self-contracting and (ii) dual representation.

Self-contracting occurs when an individual enters into a contract on both their own behalf and as a representative of the other party. For instance, A is authorized to sell or lease a property belonging to B, and A assumes the role of both seller or tenant.

Dual representation refers to a situation where the same person represents multiple parties (or even more in the case of multipartite contracts). This arises when A acts as the representative for both B and C, and proceeds to execute (sign) the contract on behalf of both parties.

In practice, in both scenarios described, the contract ultimately carries two signatures from the same individual.

The challenge in this situation arises from the fact that parties involved in a contract typically have conflicting interests. Consequently, a shared representative of the parties may find themselves in a position where they lean toward favoring one party over the other, especially when they themselves are a party to the contract.

Instances where such a circumstance occurs may be addressed through the annulment (voiding) of the contract executed via the shared representative. This constitutes a powerful remedy, with the consequence of reinstating the parties to their pre-contractual state (effectively, their performances will be returned). The annulment remedy does not apply if the shared representative acted based on an explicit mandate or in a manner that precludes the possibility of a conflict of interest.

Nonetheless, the risks are tangible. If you wish to avoid finding yourself in a situation where transactions are annulled due to issues related to flawed representation, we strongly recommend seeking legal advice before utilizing a power of attorney for dual representation.