A legal document that authorizes another person (the attorney) to act on your behalf in specified matters, including real estate transactions. A general Power of Attorney covers broad financial decisions, while a specific Power of Attorney can be limited to a single transaction, such as signing closing documents when you can't be present. It must be signed while you're mentally capable and can be revoked at any time.
Why It Matters
If you can't be physically present on closing day or need someone to handle your real estate affairs, a Power of Attorney makes it legally possible. This is common when buyers are purchasing from out of province or country. However, some lenders are cautious about POA transactions due to fraud concerns, so check with your lender and lawyer early in the process.
Real-World Example
A buyer working overseas cannot return to Canada for the closing of their condo purchase at 1 Bloor Street East. They sign a specific Power of Attorney naming their sister as their attorney, limited solely to signing the closing documents for this specific property on this specific closing date. The POA is signed at the Canadian consulate and sent to their lawyer in Toronto. The sister signs the transfer documents and mortgage on the buyer's behalf, and the transaction closes smoothly.
Ontario & GTA Context
In Ontario, a Power of Attorney for real estate transactions must comply with the Substitute Decisions Act, 1992. It must be signed while the grantor is mentally capable and witnessed by two witnesses who are not the attorney or the attorney's spouse. Many Ontario lenders are cautious about POA transactions due to fraud concerns and may require additional verification or refuse to fund the mortgage altogether. Check with your lender early if you plan to use a POA.
How It Works in Practice
If you anticipate being unavailable for closing, discuss the POA option with your lawyer well in advance. A specific POA limited to the single transaction is preferred over a general POA, as it limits the attorney's authority. Have the POA prepared and signed at least two to three weeks before closing to allow time for the lender to review and approve it.
Common Questions
Will my lender accept a Power of Attorney for a mortgage closing?▾
Can a Power of Attorney be used to sell a property in Ontario?▾
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