Selling a house with Power of Attorney can be a straightforward process when the correct legal authority is in place. But which type of Power of Attorney is needed, and what happens if the homeowner can no longer manage the sale themselves?
If you are selling a property on behalf of a parent, relative or another homeowner, understanding the difference between a Property and Financial Affairs Lasting Power of Attorney (LPA) and a Health and Welfare LPA is essential.
In this blog, we explain which Power of Attorney is needed to sell a house, when an attorney can sell a property, what happens if there is no Power of Attorney, and why it is important to put the appropriate arrangements in place early.
Can you sell a house with Power of Attorney?
Yes. A person appointed as an attorney under a properly made and registered Property and Financial Affairs Lasting Power of Attorney can generally deal with the donor’s property, including selling their home, provided the LPA gives them the appropriate authority.
The person who creates the LPA is known as the donor, while the person appointed to act on their behalf is the attorney.
The important point is that not all Powers of Attorney allow someone to sell a property.
A Health and Welfare LPA, for example, does not give an attorney authority to sell the donor’s house.
What type of Power of Attorney is needed to sell a house?
There are two main types of Lasting Power of Attorney in England and Wales:
- Property and Financial Affairs LPA
A Property and Financial Affairs LPA allows an attorney to deal with the donor’s financial affairs and property.
This can include:
- Buying or selling property
- Managing bank accounts
- Paying bills
- Managing investments
- Dealing with pensions and benefits
- Handling other financial matters
For someone who needs another person to sell their house on their behalf, this is the relevant type of LPA.
The Government confirms that a Property and Financial Affairs attorney can sell the donor’s home.
- Health and Welfare LPA
A Health and Welfare LPA covers very different decisions.
It can allow an attorney to make decisions about matters such as:
- Healthcare and medical treatment
- Where the donor should live
- Day-to-day care
- Personal welfare
- Life-sustaining treatment, where the donor has given the appropriate authority
A Health and Welfare LPA does not give an attorney authority to sell the donor’s property.
If a property needs to be sold, the relevant authority will normally need to come from a Property and Financial Affairs LPA.
Is a Power of Attorney required to sell a house?
Not necessarily.
If the homeowner is selling their own property and is able to make and communicate their own decisions, they do not need a Power of Attorney simply because they are selling their house.
However, a Power of Attorney becomes particularly important where someone else needs to act on the homeowner’s behalf.
For example, this could be because the homeowner:
- Has lost mental capacity
- Is physically unable to deal with the transaction
- Is seriously ill
- Is living in a care home
- Is abroad or otherwise unable to manage the sale
- Wants a trusted person to manage their financial affairs
Where another person needs legal authority to deal with the property, a properly registered Property and Financial Affairs LPA may provide that authority.
Why should a Property and Financial Affairs LPA be put in place before it is needed?
One of the most important considerations with a Lasting Power of Attorney is timing.
A person must have the necessary mental capacity to create an LPA.
If someone loses mental capacity before making one, they cannot simply create an LPA afterwards.
Instead, a family member or another person may need to apply to the Court of Protection to be appointed as a deputy.
This can be a more involved process and may cause delays when important decisions need to be made.
For homeowners, this can become particularly significant if a property needs to be sold to fund care fees, move into alternative accommodation or deal with other financial circumstances.
Putting an appropriate LPA in place in advance can therefore provide greater certainty about who can deal with the homeowner’s property and finances if they subsequently become unable to do so themselves.
Does a Power of Attorney need to be registered before selling a house?
Yes. A Lasting Power of Attorney must be registered with the Office of the Public Guardian before an attorney can use it.
Simply completing and signing an LPA does not mean that the attorney can immediately start acting under it.
The registration process can take time, so this is something homeowners should consider as part of their wider estate planning.
If a property sale is already underway and an LPA has not yet been registered, it is important to speak to the solicitor dealing with the transaction as soon as possible.
Can an attorney sell a house if the owner has lost mental capacity?
A Property and Financial Affairs LPA can allow an attorney to continue managing the donor’s property and financial affairs if the donor subsequently loses mental capacity.
This is one of the reasons why an LPA can be valuable as part of future planning.
However, an attorney does not simply become the owner of the property.
The property still belongs to the donor.
The attorney is acting on the donor’s behalf and must follow the legal duties that apply to attorneys, including acting in the donor’s best interests.
Can an attorney sell the house to themselves?
This is an area where particular care is required.
An attorney must act in the donor’s best interests and should not use their position to benefit themselves improperly.
A proposed transaction involving the attorney, a relative or someone closely connected to the attorney can raise significant legal issues.
For example, if an attorney wants to purchase the donor’s house themselves, specialist legal advice should be obtained before proceeding.
The Government advises attorneys to seek legal advice in circumstances where they may have a conflict of interest or where the proposed transaction requires particular consideration.
Selling a house under Power of Attorney: what does the estate agent need to know?
If you are instructing an estate agent to sell a property on behalf of someone else, it is important to explain the Power of Attorney position at the outset.
The estate agent will need to know:
- Who owns the property
- Who has authority to act for the owner
- Whether the LPA has been registered
- Who the attorney or attorneys are
- Whether there are any restrictions affecting the attorney’s authority
The estate agent can then work with the appointed solicitor to ensure that the transaction is handled appropriately.
The conveyancing solicitor will ultimately deal with the legal aspects of the sale and will need to be satisfied that the person signing documents on behalf of the owner has the necessary authority.
What happens if there is no Power of Attorney?
If the homeowner has lost mental capacity and there is no registered Property and Financial Affairs LPA, a family member cannot automatically take over their financial affairs or sell their property.
In some circumstances, an application may need to be made to the Court of Protection for a deputyship order.
This can take additional time and involve further costs and legal or administrative work.
For this reason, Powers of Attorney are often considered as part of wider estate planning and later-life planning.
What if there are two attorneys?
A donor can appoint more than one attorney.
The LPA will specify whether the attorneys must act:
- Jointly — meaning they must generally make decisions together; or
- Jointly and severally — meaning they can act together or independently.
This distinction can be particularly important when selling a property.
If there are multiple attorneys, the conveyancing solicitor will need to establish how the attorneys are authorised to act and ensure that the necessary documentation is correctly executed.
Need advice about selling a property under Power of Attorney?
If you are selling a property on behalf of someone else, speak to a qualified solicitor experienced in property and Power of Attorney matters before proceeding.
Your estate agent can help coordinate the sale with the solicitor and ensure that the correct information is provided from the outset.
This article is intended as general information for England and Wales and does not constitute legal advice. The precise authority available to an attorney will depend on the wording and circumstances of the relevant Power of Attorney.
