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What is the power of attorney?
If you agree with a friend that they can enter into a contract to buy a property for you, then power of attorney is a written confirmation of that agreement. However, it is only a unilateral confirmation of such authority, which is intended to be addressed primarily externally, in this case of the homeowner, who will know that the friend can represent you in this matter. If the sale takes place, the rights and obligations arising from it will accrue directly to you.
The person who represents someone else under the power of attorney is called the “agent” and the person who grants the power of attorney is called the “principal.” The power of attorney is executed through the power of attorney agreement. Both the principal and the agent may be a natural person or a legal person.
Are you dealing with a legal problem in relation to a power of attorney?
When can I use a power of attorney?
You can use a power of attorney to represent another person, for instance, when you do not feel sufficiently knowledgeable enough for a certain action, typically, for example, legal actions and legal representation that you entrust to a lawyer. But the reason can also be much simpler. For example, you are going on vacation and do not have time to deal with certain matters. Then you might instruct a family member, for example, to pick up a parcel at the post office or to enter into a contract on your behalf.
General and special powers of attorney
In general, there are two basic types of power of attorney:
- General power of attorney – when the power of attorney is granted for all matters without specific definition and specification.
- Special power of attorney – we can identify one specific (or many specific acts) for which we authorize the principal. Thus, in the case of the above-mentioned power of attorney to purchase real estate (if formulated as a special power of attorney), the principal cannot purchase, for example, a car for us.
How is the power of attorney written?
A power of attorney is usually in writing. Theoretically, a power of attorney can also be oral, but the condition is that no written form is required for the act (as is the case with the sale of real estate). The second condition is that the person to whom the power of attorney will be directed is informed of the persons, of the principal and the agent, and of the scope of the power of attorney.
In practice, however, an oral power of attorney is rather impractical and is definitely not recommended for achieving legal certainty. For a general power of attorney, a written form is always necessary.
On the contrary, even a written power of attorney is insufficient in some cases and a notarised signature or even a notarial deed is required. A power of attorney can be granted for an indefinite period of time or can be limited in time.
For the validity of a power of attorney, its elements are important. It must contain at least the following information:
- Identification of the principal and the agent (name and surname, date of birth or birth number and place of residence),
- If the principal or agent is a legal person, then its name, registered office and registration number,
- A definition of the scope of the authorization, i.e. the exact wording of what the representative is authorized to do,
- The date on which the power of attorney was granted.
The signature of the principal is not required. After all, it is he or she who later proves himself or herself with the power of attorney, and thus his or her consent can be assumed. On the other hand, nothing can go wrong with it either. It is enough to add a phrase such as “I accept the power of attorney in its entirety,” and to then add your signature.
Tip: Unless there is absolute trust between you and the agent, it is advisable to define the scope of the power of attorney in real detail – e.g. whether the attorney-in-fact is also authorized to accept the purchase price, sign the agent’s custody agreement and other requirements related to the main transaction.
Termination of power of attorney
There are several ways in which a power of attorney can be terminated:
- Execution of the act for which the power of attorney was granted – if the power of attorney is defined with respect to one specific fact – for example, the purchase of a house, then by achieving its purpose, the power of attorney expires.
- Expiry of the term – if the power of attorney has been set for a period of time for which the power of attorney is limited, then the power of attorney ends upon its expiry. Thus, for example, you can issue a general power of attorney for the duration of your six-month stay abroad.
- Termination of the power of attorney by the agent – the attorney-in-fact cannot, of course, be compelled to keep the commitment in any circumstances. He can therefore terminate the power of attorney and subsequently do everything that cannot be delayed to avoid causing the principal any harm.
- Death of the agent or principal.
- Revocation of the power of attorney – the principal has the right to change his or her mind at any time and, for example, to be represented by another lawyer or another person. The revocation must be demonstrably delivered to the attorney-in-fact, preferably by hand or by registered mail.
Tip: Note that until the revocation is known to the agent, his or her legal action is the same as if it were still in effect.
Specific situations in which we will use a power of attorney
Power of attorney to take delivery
A power of attorney to collect a parcel does not have a specific form by law. However, the Czech Post requires an officially certified signature. A special instrument designated by the Czech Post for these occasions is the so-called Receiver’s Card, which authorizes the attorney to receive parcels, the pension of the other spouse (if not in his/her own hands) and remittances (except for parcels and remittances intended for the addressee’s own hands only) on behalf of the addressee.
Power of attorney for transfer of electrical services
Situations in which electrical services are transferred to another person can include relocation, sale of house, or death of a customer. To avoid a complicated dispute over the dates in which you will appear at the energy provider’s premises, you must sort everything out efficiently with a power of attorney. All the paperwork can then be handled by just one of the parties involved and the process will be considerably simplified and sped up. Large energy suppliers such as Pražská plynárenská or ČEZ have power of attorney forms available on their websites.
In this context, we also encounter the power of attorney when changing suppliers. New suppliers offer to provide us with a transcription based on a power of attorney as part of their services. In this case, however, be sure to study the contract with your current provider to see if you have, for example, any penalties or other hidden conditions in it.
Power of attorney for vehicle transfer
Vehicle reassignment is another situation where a power of attorney is used. Again, this can simplify a situation where both the seller and the buyer would have to negotiate complicated terms that suit both. All you have to do is to provide the buyer with a power of attorney for the car transfer and then the buyer will deal with everything himself.
Power of attorney for the sale or purchase of real estate
A power of attorney can be used for the purchase or sale itself, as well as for a partial act such as a registration in the Land Registry. The power of attorney for the sale of real estate should contain, in addition to the general requirements, the identification of the real estate being sold. It is worth listing all the legal acts and actions that the agent is usually allowed to do when selling or buying the property.
The power of attorney for the representation of a party must be signed with an officially certified signature.
In the context of real estate ownership, we also encounter a power of attorney for representation of a property owner at a HOA (unit owners’ association).
Tip: Often, the entry at the Land Registry is rejected commonly because of errors in the entry form or the power of attorney. It is better to have the documents prepared in advance for this occasion by a lawyer.
Power of attorney for representation in succession proceedings
If you want to authorize a person to deal with the succession on your behalf, it is advisable to specify in the power of attorney all the acts that the attorney may perform on your behalf (accept the succession, conclude an agreement on the settlement of the succession, refuse the succession, lodge appeals, etc.). It is advisable to inform the notary in advance of the power of attorney and its scope so that he/she is aware of this situation. The power of attorney must be in writing in such a case.