The in’s and out’s of signing a Power of Attorney. It is common for a person wishing to authorise a trusted party to act on his or her behalf to sign a document known as a “power of attorney” (abbreviated as “POA”). But how does this far reaching document work and what are the pitfalls?

Generally, in our law, one can authorise a representative by oral or written means, without having to meet any formalities. How-ever, one exception is contained in the Deeds Registries Act which provides that a conveyancer may not execute a deed of transfer of an immovable property or a mortgage bond before a registrar of deeds unless he or she is authorised to do so “by power of attorney”. To be acceptable to a deeds registrar a POA must be in writing and attested by two witnesses over the age of fourteen years, or by a commissioner of oaths, magistrate or justice of the peace.
A drawback in connection with POA’s is that it can only be acted on by the representative while the grantor (principal) still has the capacity to act himself. Some jurisdictions recognise “enduring” powers of attorney in terms of which the representative remains empowered even after the principal loses his capacity. South African law does not recognise the enduring POA; if a principal loses his capacity to contract, for example he falls into a coma, or is declared mentally incapable of administering his affairs, then his representative equally loses the authority to act on his behalf using a POA even if it was executed when he had capacity.
Clearly a POA cannot be used to transact on behalf of a principal who has died; the POA “dies” with the principal and only a properly appointed executor may act on behalf of the deceased estate.
A danger in signing a POA is that although it can be revoked by notice to the representative, it isn’t easy for a principal to notify the world at large of this. If the representative presents the POA to an unknowing third party who is induced to act on the face value of the POA, the law will protect that innocent third party.
A power of attorney can be a very useful tool to ensure that trusted persons can look after your affairs when you are unable to do so, but their limitations and pitfalls should be considered.