Real estate transactions can be complex, especially when it comes to understanding the role of a Power of Attorney (POA) holder in receiving payments. One common question in sales or leasing deals revolves around whether a POA holder can receive cheques on behalf of the property owner in the name of the POA holder and not the owner. This article aims to explain this issue in a straightforward manner, highlighting the importance of a valid and legally recognized Power of Attorney.
The Legitimacy of POA
Firstly, it's crucial to establish that a POA holder's ability to receive payments in their name is allowed under specific conditions. The key condition is having a legally valid and officially attested Power of Attorney from any registered Notary Office in UAE and if outside UAE to include the attestation from the Emirates Embassy and Ministry of Foreign Affairs. This document explicitly grants the POA holder the authority to sell or lease the property and receive funds on behalf of the owner in their name as beneficiary.
Dubai Land Department/Trustee Office Approval
Armed with a legally attested POA, the POA holder can confidently navigate through the Dubai Land Department or Trustee Office processes. These governmental bodies overseeing property transfers acknowledge and respect the authority granted through a valid POA. Consequently, the POA holder is permitted to receive the selling price via a manager's cheque made out in their name as POA holder, aligning with the legal framework & authority from the owner that is established in the POA document.
Considerations for Finance Buyers
While the POA empowers the holder to handle financial transactions, it's essential to note that some banks may subject it to additional analysis. Finance buyers, in particular, may face challenges as banks assess the acceptability of the POA for issuing cheques. Despite a legally binding POA, some banks may insist on issuing cheques only in the name of the property owner, not the POA holder.
Special Considerations for Different Payment Methods
In cases where the owner and buyer opt for alternative payment methods outside the conventional manager's cheque, additional considerations come into play. If funds are transferred through methods other than a manager's cheque, the POA holder's authority is limited to confirming only 10% of the selling price. The physical presence of the owner becomes essential for confirming the remaining 90% at the Trustee Office. Otherwise, if the owner cannot be physically present, an officially attested declaration from the owner becomes a vital document. This declaration confirms the receipt of funds by the owner, enabling the POA holder to present this comprehensive documentation to the Trustee Office for the successful completion of the property transaction.
The Bottom Line
In summary, whether a person holding a Power of Attorney (POA) can receive payments on behalf of property owners in real estate transactions depends on the legitimacy of the POA. A legally recognized and officially attested POA is crucial for gaining the trust and approval of the Dubai Land Department/Trustee Office, making the whole process smoother.
However, it's important to be mindful of complexities related to bank approvals and different payment methods. Some banks may insist on issuing cheques only in the property owner's name, which needs prior follow up with the bank’s legal team about their acceptance of the POA.
In essence, the key takeaway is clear: a well-crafted and officially recognized POA is essential. It not only empowers the holder but also protects the interests of everyone involved in the real estate transaction, promoting transparency and speeding up property deals in Dubai.
For further information or to address any inquiries related to our conveyancing services, please reach out to our Sales Progression Officers/Conveyancers team at 00971588229107 or 00971521289592, or email us at [email protected] or [email protected]. You can also explore our comprehensive services on our official fam Conveyancing website. We are committed to keeping you informed and empowered in navigating Dubai's real estate landscape.