Before You Give Or Donate That Power Of Attorney
HAPPY NEW YEAR to all our esteemed readers! We are really excited to welcome you into the new year. Now that the Christmas and New Year events have been observed and celebrated, the next event would be for everyone to return to his place of domicile in readiness for the business activities for this year, 2019. Thus, in the spirit of a new year and anticipation of return trips, i have decided to put up this inspiring article about power of attorney.
As celebrations has rounded off, there is no gainsaying the fact that everyone who travelled to celebrate this festive period would be returning to his place of domicile (either in Nigeria or abroad). No doubt, during this festive period, some people completed the construction of their houses, inspected their newly purchased land(s) with a view to starting a construction project this year, and others dedicated and opened their newly constructed built houses. A big Congratulation to those who fall into any of these categories.
Now, following the need to travel back to your various places of domicile, these sets of persons earlier referenced above (‘property owners’) will find themselves in a position where they may not always be available to manage the said properties as a result of their absence – thus necessitating the need to put the properties under the care and management of other persons who are believed to be in a better position to manage them as a result of their availability. To do this, the property owners will have to give or donate an instrument in favour of such persons to aid them manage the properties efficiently. Thus, this instrument usually in form of a written document given by the property owners to other persons authorizing them to manage the properties on behalf of the property owners is known as a ‘Power of Attorney’. Here, the property owner who gives or donates the authority is known as a ‘Donor’; and, the person to whom an authority is delegated to manage the properties is known as a ‘Donee’.
In many instances, Nigerians in diaspora are afraid of giving or donating this instrument on the assumption that the Donee may take undue advantage of their long absence to convert their properties without their knowledge. Whilst this assumption may not be erroneous as there are bound to be persons who are naturally fraudsters in every business endeavor, however, the mere donation of a Power of Attorney by the Donor to the Donee is not an automatic ticket for the Donee to act however he pleases – for a Power of Attorney does not in any way transfer an interest in land and same can be revoked by the Donor. While it is advisable to give or donate a Power of Attorney to a trusted Attorney or Professional, there is no denying in the fact that in practice, some Donees often collude with third parties to dispose of the properties of the Donor. This is especially so where the Donees have access to the Donors’ original title documents.
However, be it as it may, the mere fact that a Donor is apprehensive or suspects that a Donee may convert his property should not be a yardstick for denying himself a proper management of his property following his absence. It is like having a broken down engine and you are afraid of taking your car to a mechanic on the suspicion that the mechanic may tamper with other working compartments of the car. The question that will follow is: who then will fix the car’s engine?
In a similar vein, if the Donor acts on the assumption that a Donee may abuse his powers where a Power of Attorney has been given to him, one would be inclined to ask:
- Would it be reasonable or practicable where a Donor has to travel frequently to Nigeria to ensure that he personally collects rents from tenants residing in his property?
- Would the Donor be in a better position to manage the property considering his long absence?
No doubt, the answers to the above questions are in the negative. This is because if you calculate the cost of travelling as against the rents collected, you would find out that the cost of travelling is more costly than the rent sought to be collected. It would be a case of ‘Penny wise, Pound foolish’. It is also common sense that a better manager of a property is the one who is on ground to monitor the activities that go on in the property. Based on these assertions, a Donor may thus be constrained to give or donate a Power of attorney for the efficient management of his property in the course of his absence.
Though before you take a decision to give or donate a Power of Attorney, it is pertinent that we educate you on certain principles that revolve around a Power of Attorney;
- A Power of Attorney does not transfer an interest in land; hence, a Donor should not be afraid to give or donate one.
- A Power of Attorney can be given or donated to more than one person. By so doing, each Donee checkmates the excesses of the other. However, it is important to point out that it is more expensive to give/donate a Power of Attorney in favour of two or more persons.
- A Power of Attorney vests the Donee with Authority to take decisions on behalf of the Donor for the proper management of the property.
- A Done can be held liable if he acts in excess of his authority and/or where he fails to act in pursuance of his authority.
- A Power of Attorney can be revoked.
Having learnt the above principles, it is important for the Donor to take the following caution while giving or donating a Power of Attorney. He should:
- Clearly spell out the duties of the Donee.
- Indicate that the Donee has to give a periodic account of his management/stewardship.
- Not hand over his original title documents as it is not necessary to do so.
- Get trusted/credible professionals.
- Indicate a time-line if necessary for the exercise of the Donee’s authority.
That being said, where the Donor has given or donated a Power of Attorney to a credible Professional, it will no doubt save the Donor a whole lot of stress, time, and money. Furthermore, in the event there is a law suit in respect of the property, the Donee can bring or defend such action on behalf of the Donor and thus saving the Donor the rigmarole of an avoidable and unnecessary travels.