Appointing a power of attorney in Dubai

It’s a niche in Dubai, but is often the most practical way of getting property transactions done efficientlyPhilip Smith

I often get asked what I do for a living and when I say I represent property investors as the power of attorney (POA) in Dubai, most seem intrigued. They are familiar with the term Power of Attorney from American TV shows such as Boston Legal and Suits, but are not always up to speed on what is actually involved in real life. It certainly remains a niche area in the property market in Dubai.

So, what is a POA? This is a written authorisation to represent someone or act on someone’s behalf in private, business and other legal or financial affairs. In Dubai, POAs are used in a wide range of  circumstances, including handling business operations, managing bank accounts, paying daily expenses, and buying/ selling property.

In real estate, the use of a POA is often the most practical way of getting a property transaction finalised quickly and efficiently without having to be present personally.

Types of POAs

For real estate transactions in Dubai, POAs tend to fall into two categories – general and special.

General POAs give broad powers to act whereas special POAs are specific, being limited in terms of scope and/or time. A POA for a property purchase in Dubai can be general, allowing the grantee to purchase more than one property on the grantor’s behalf. However, there are restrictions. A POA can’t be used to access bank accounts or apply for mortgages on a buyer’s behalf.

For a property sale, the POA must be specific to the property as per the  title deed, mentioning the unit number, building name, plot number and community details. The chosen representative, therefore, only has the authority to conduct the sale of that particular property.

Perhaps more importantly, a POA in Dubai cannot receive sale funds in his name. All sale funds must be by the manager’s cheque payable to the owner’s name as stated on the title deed. This is a significant step to ensure that property owners are safeguarded under the law.

Validity of a POA

Generally speaking, a POA continues until it is revoked or expires according to its terms. It can be revoked at any time. The grantor simply needs to obtain the original document and file a written request of the revocation at the office where the POA was signed.

The duration of a POA also depends on the laws of the country in which it is being used. In Dubai, this is a two year period.

Process for issuing a POA

The process is straight forward. In Dubai, a POA must be notarised by the Dubai Notary Public. For overseas clients, the POA must be notarised and legalised by the foreign office (or equivalent) and the UAE Embassy in that particular country. It also needs to be attested at the Ministry of Foreign Affairs once returned to Dubai.

Things to consider

Assigning a POA does involve an element of risk so it should not be done without due consideration. Whoever you instruct becomes you in a legal sense, giving that person the right to act and make decisions which are legally binding upon you.

It is vital to make sure you are comfortable with all of the terms included and only use someone who is qualified. Do not appoint someone because they are cheaper as this is definitely not the best way to protect your interests.

Trust is paramount

You need to feel 100 per cent happy that the chosen representative is honest and reliable. They should have an understanding of their duty and the resources to carry it out. They must possess knowledge of the task, experience in completing similar actions and the necessary skills to act competently. A legally qualified representative is highly recommended.

It will help to appoint someone who is based in Dubai, available when required and understands local regulations. A strong network will make it easier to get things done and avoid the risk of delays and/or disputes.

Finally, there should be no conflict of interest with you or the task at hand. A POA should be acting in your best interests, not their own. A 2015 decree from the Dubai Land Department prevents anyone working for a real estate company in Dubai, regardless of designation, from acting as a POA. This was introduced to prevent conflicts of interest and any abuse of power.

Benefits of a POA

It is a very useful legal instrument when used in the correct manner and given to the right person. It will alleviate significant time, costs, stress and inconvenience by allowing someone to take care of everything for you.

Take property transfers as an example. Both the seller and the buyer need to be present to complete all of the steps in the transfer process, from signing of the Memorandum of Understanding through to the final transfer at the Dubai Land Department. This includes work with developers (No Objection Certificates), brokers, banks/mortgage providers and utility companies.

All of these take time, meaning both parties either need to be present for the full process, which can take 4-6 weeks, or make multiple visits back and forth to handle things personally.

For those who have important personal or business commitments, it can be quite a challenge to juggle all of these, especially if you are unfamiliar with all of the complicated and ever-changing processes in Dubai.

A POA can take care of everything on your behalf from start to finish, including signing all paperwork, providing full representation and finalising the property transaction quickly and efficiently.

A good power of attorney will also be able to guide you through the necessary steps and provide advice, updates and feedback at every  stage of the process.

Source: Philip Smith, Special to Property Weekly

The author is Managing Partner of Your POA Dubai

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