The power of attorney 

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The live overseas legal panel explain the role of a portuguese Power of Attorney

A Power of Attorney is established in the Portuguese Civil Code as the voluntary act of giving representative powers to someone else. It is a legal document, whereby one person gives another person (the attorney) the power to act on his or her behalf with regard to his/her property affairs. The benefit of having a Power of Attorney is that they understand the country, language, market and culture you are investing in and are therefore able to best protect your interests when purchasing overseas.

The Power of Attorney is a very specific and personal document, which varies in the extension of powers. For instance, you can give a Power of Attorney for someone just to sign the Promissory Contract of purchase and sale on your behalf, or you can give them powers to sign all the documents regarding your investment.

Usually, when investing in a property overseas there are certain documents that you will need to sign, namely the promissory contract of purchase and sale, the provisory registers for your mortgage, the deed, etc. To avoid having to travel in different times to sign these documents you can appoint a Power of Attorney to do it on your behalf. This can be done at any time, depending on your arrangements, but always before completion date.

CHOOSING AN AGENT
It is very important that the object of the Power of Attorney is clearly established, the content must be clear, and can cover the following aspects:

• delegate the mandate
• manage bank accounts
• draw bank loans for property acquisition
• receive funds and give quittance
• acquire, free of charges and encumbrances, properties
• sign the Promissory Contract
• sign deeds
• constitute a mortgage over the property as guarantee of payment
• representation at any official entity, namely Tax Departments, Municipalities and Real Estate Registries
• proceed with any acts related to property registration, temporary or definitive, cancellations or annotations
• fill in, sign and alter the periodic tax declarations related to Stamp Duty, IMI (municipal tax) and IMT (property transference tax)
• present claims
• receive cancellation titles and their corresponding amounts
• request fiscal evaluations and tax department registrations.
  

Investors need to be particularly careful when choosing an agent for the Power of Attorney, since that agent will have all the authority to act on their behalf and the investor will be accountable for all the acts the agent makes. The investor should choose someone based on their credentials and credibility in the business, as well asking for a reference and making sure that the information given is true. Our expertise has taught us that the investor should choose a lawyer who is used to working with foreign investment and it's a mandatory selection requirement that the lawyer has professional insurance.

LEGAL AND FINANCIAL DECISIONS
It is possible to appoint more than one agent in a Power of Attorney, although usually that has to be in the same Power of Attorney document, because if it's two different documents the most recent one makes the previous one invalid. Also the Power of Attorney can state that the agent can delegate the mandate.

Once you sign a Power of Attorney you can continue to make legal and financial decisions yourself. The Power of Attorney doesn't take the decision-making power away from the investor; in fact, the agent must use the Power of Attorney according to the investors' decisions. At any time the Power of Attorney can be revoked by the investor.

The agent should always keep the investor informed of the steps taken in the conveyance process. Also the agent should clarify all the queries the investor has and keep an ongoing line of communication with the investor.

Unfortunately, there is always an element of risk where an agent can steal money or property. To avoid this sort of issue the investor should choose a law firm that has professional insurance together with the expertise required in foreign investment. Specialised law firms have ways of establishing a secure Power of Attorney in order to avoid these issues. If a lawyer steals the investor's money or property, it constitutes a crime and the lawyer can lose his licence. If the agent doesn't follow the investors' instructions, the Power of Attorney can be immediately terminated.

We do advise that a lawyer draws up the Power of Attorney, not only because they have the best legal information to do so and know what kind of powers can and cannot be given, but also because usually the Power Of Attorney needs to be legalised, either by Notary, Consulate or Lawyer.

To have a legalised Power of Attorney you need to pay the respective fees. As for any fees relating to the mandate, that depends on who you choose to be your agent and the conditions in which that mandate is going to be carried out.

There can be many complicated buying, tax and legal issues to contend with when buying overseas particularly in less established destinations. It is very important to understand that not one single EU country has the same buying procedures as another and individual countries and regions have their own property laws.

The holder of a Power of Attorney has to be someone you can trust with your investment and who will protect your interests and ensure your purchase is as stress free as possible. They ensure local control, peace of mind and in many cases drive a quicker and safer property transaction.

Contact Details:

Miguel Almeida Fernandes, Ricardo Pica and Teresa Pelarigo dos Santos from Plataforma Legal

For more information, go to: www.live-overseas.co.uk
www.legal.com.pt


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