Sometimes the buyer or vendor in a property transaction is acting through a Power of Attorney (POA) — a registered legal document authorising one person (the attorney) to act for another (the donor). POAs commonly arise when the principal is overseas, hospitalised, or has lost legal capacity. Done correctly, transactions through POA settle without issue. Done incorrectly, the contract can be unenforceable, the title transfer can be set aside, and the attorney may be personally liable.
This guide covers the types of Power of Attorney available in Victoria, registration requirements, lender treatment, and the contract checks for transactions involving a POA.
Three types of Power of Attorney in Victoria
Under the Powers of Attorney Act 2014 (Vic):
| Type | Used for | Registration | Property dealings |
|---|---|---|---|
| General POA | Specific tasks, fixed period | Optional | Limited — confirm scope |
| Enduring POA (financial) | Continues despite loss of capacity | Recommended for property dealings | Yes |
| Supportive Attorney | Decision support, not autonomy | N/A — cannot act for principal | No — cannot sign contracts |
Registration with Land Use Victoria
For a POA to be used to transfer land, it must be registered with Land Use Victoria. Registration:
- Costs about $200 in lodgement fees
- Takes 5–15 business days
- Creates a permanent searchable record
- Confirms the document’s authenticity to dealing parties
An unregistered POA cannot be used to sign or settle a property transaction. Confirming registration before contract signing is essential.
Lender treatment of POA transactions
Lenders are particularly cautious about POA transactions because of the higher fraud and challenge risk. Common lender requirements:
- Original (or certified copy) of the registered POA
- Certificate of legal capacity from a medical practitioner if the principal is incapacitated
- Statutory declaration from the attorney about the principal’s wishes
- Independent legal advice for the attorney
- Sometimes: court order confirming the validity of the POA
Some lenders refuse to lend on transactions where the buyer is signing through POA, particularly for investment properties. Check with your lender before contracting.
Conflict of interest issues
An attorney has fiduciary duties to the principal. A property transaction may create a conflict of interest if:
- The attorney is also a beneficiary of the principal’s estate
- The buyer or seller is related to the attorney
- The price is below market value
- The principal would be prejudiced by the transaction
Conflict-of-interest transactions can be set aside under the Powers of Attorney Act. The attorney can also face personal liability and removal of the POA.
Section 32 and contract checks for POA transactions
- Get a copy of the registered POA.Confirm: principal’s name, attorney’s name, scope of authority, any conditions or limits, registration details.
- Confirm registration with Land Use Victoria. Title search shows the registered POA reference.
- Verify the POA is current.Check the principal hasn’t died (which terminates the POA), revoked it, or lost capacity in a way that ends the POA.
- Identity verification.The attorney’s identity must be verified, with original documents.
- Independent legal advice. Both attorney and beneficiary should receive independent advice for any complex transaction.
- Special conditions. Build in time for the attorney to obtain any necessary medical or legal certificates.
Common pitfalls
- POA expired or revoked. Check the document is current. POAs can be revoked in writing at any time by the principal.
- Principal regained capacity. Some enduring POAs require the attorney to consult the principal if capacity is regained — failure to do so voids the transaction.
- Multiple attorneys with joint authority. Some POAs require both attorneys to sign jointly. Single-signature documents are invalid.
- Dispute among beneficiaries. Family Provision claims can be triggered by transactions perceived as self-dealing.
Ready to check your contract? Upload your Section 32 or Contract of Sale at precontractreview.com for a pre-contract check — typically in just a few minutes.