How do you know whether there is a valid Power of Attorney? Unless, it’s tested in the Courts, you can’t really be absolutely certain, but the Courts do have some “good news”.
Recently, the matter of the execution of a Power of Attorney for Property has been reviewed by the Ontario Court of Appeal.
The legal tests which apply concerning the capacity to make a Will also apply to the execution of a Power of Attorney.
There a few things to bear in mind:
- There is a presumption that the Power of Attorney is valid
- This presumption arises upon the execution of a document which complies with the formalities of execution, that means it is signed, has two witnesses and it regular on its face
- The presumption may be rebutted
- There is a presumption that the Donor of the Power of Attorney has mental capacity
- This presumption too, may be rebutted
- If there are suspicious circumstances, the onus of proof changes
- The person advancing the Power of Attorney must prove there is no undue influence.
The case was Vanier v. Vanier (Ontario Court of Appeal 30 June 2017).
Essentially, if there is in fact a Power of Attorney document, and it looks “ok”, then you are “good to go” unless there’s an actual challenge to it.
So, if you are listing a property or buying a property, you are not placed upon “further inquiry” in the due diligence period unless you were confronted with some news to the contrary”.
However, be absolutely sure that the Power of Attorney covers assets.
Brian Madigan LL.B., Broker