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What should a power of attorney contain for property transactions?

In the judicial practice is still debatable what should a power of attorney contain in order to secure the realization of a valid transaction with property. According to proponents of one of the arguments, it is enough to record in the power of attorney that the authorized person has the right to dispose of the assets of the represented by the means of specific actions such as donation, sale, exchange, mortgage, etc. without detailing the essential elements of the transaction. The latter is valid, but for the unsettled clauses in the contract the attorney is responsible to his principal.

The other opinion is that for real estate transactions it is required to indicate not only the specific nature of the transaction but also the material terms of the contract such as property, price, party and others. In the absence of exhaustive enrollment it is assumed that the power of attorney is general and provision of unlimited representative power and provision of authorization for the attorney to negotitate any conditions he finds suitable does not express the will of the principal on the basic parameters of the transaction and is not a valid specific authorization. The conclusion is that a deal made with a general power of attorney is one without authorization within the meaning of Art. 42, para. 1 OCA.

Because of the serious consequences of the resolution of the question, the deputy chairman and head of the Commercial Division of the SCC – Tanya Raykovska and the deputy chairman and head of the Civil Division of the SCC – Krasimir Vlahov, approached the General Assembly of the two divisions at the end of 2014 with a proposal for a preliminary ruling in order to unify the judicial practice. So far four hearings have been held but judges have not reached a consensus. The next is scheduled for 11.10.2016.

 

author: Vesela Velinova, attorney-at-law

Member of “Velinov and partners” Consulting House

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