Suppose you need to work overseas for a few years, and during this time, you want to rent out your property in Singapore. Instead of frequently making international calls to your agent and mailing documents back and forth, you can simply engage a lawyer to draft a Power of Attorney (POA) before you leave Singapore, allowing you to work abroad with peace of mind. Particularly when it comes to property, a Power of Attorney can authorize a trusted friend or relative in Singapore to do anything on your behalf, such as appointing an agent to find tenants, signing lease agreements, collecting rent, and negotiating renewals—essentially, all the things you could do yourself if you were in Singapore and physically able.
Another example of using a Power of Attorney is if your bedridden relative needs to move to a nursing home and requires you to help sell their house and handle some banking matters for them. They can execute a Power of Attorney to authorize you to handle these affairs on their behalf.
What is a Power of Attorney?
A Power of Attorney (POA) is a legal document in which a natural person (the donor) appoints another natural person (the donee) to handle legal transactions on his/her behalf due to practical constraints, such as buying, renting, managing, or selling an HDB flat or private property.
Who Can Execute a Power of Attorney?
Any person who has legal capacity (is at least 21 years old and not bankrupt) and mental capacity can execute a valid Power of Attorney.
Section 4 of the Mental Capacity Act states that a person is considered to lack mental capacity if they are unable to make a decision for themselves regarding a matter due to an impairment or disturbance in the functioning of the mind or brain, whether that impairment or disturbance is permanent or temporary.
The following are four key tests to determine if a person lacks mental capacity:
1. They are unable to understand any information relevant to the decision they are making;
2. They are unable to retain that information;
3. They are unable to weigh the relevant information as part of the process;
4. They are unable to communicate their decision, whether by speaking, sign language, writing, or other means.
What Else is Required for a Power of Attorney to be Accepted for Use?
First: Clear and Precise Wording
A Power of Attorney must be drafted in clear and precise language, without any ambiguity, so that there is no room for a third party to raise questions and refuse it. The powers granted to the donee must also be explicitly stated. For example, if you want to authorize the donee to purchase a private condominium on your behalf, you must clearly state that they have the authority to obtain a housing loan and, if applicable, to apply for the withdrawal of your Central Provident Fund (CPF) savings to pay for the purchase or the monthly loan installments.
Of course, if you do not need a loan or to use your CPF, then you do not need to write these powers into the Power of Attorney. But if, like most people, you do, then you must include these specific powers in the document. Otherwise, the donee will not be able to do these things for you, and the progress of the property purchase will be correspondingly delayed until a new Power of Attorney is drafted and sent overseas to get your signature.
Second: Proof of Due Execution
The donor must sign in the presence of a lawyer. If signing overseas, it must be witnessed by a notary public practicing in the foreign jurisdiction or a Singapore consular officer in the local country. The lawyer, notary public, or consular officer acts as a witness and must certify that the donor has legal capacity and understands the document he/she is signing (has mental capacity), and then confirm the execution of the Power of Attorney by signing a certificate to that effect.
Third: Registration of the Power of Attorney
The Power of Attorney must be registered and filed with the High Court of Singapore. Anyone who is asked to accept a Power of Attorney for use can check with the High Court to verify that it is valid and has not been revoked.
Why Are There So Many Requirements for a Power of Attorney?
Suppose you are the buyer of a property, and the seller, who is overseas, is executing the sale and purchase agreement and transferring legal ownership to you through their donee under a Power of Attorney. You would certainly want to be sure that the donor had the legal and mental capacity when signing the POA, and that the donee has the authority to transfer the property ownership to you. Similarly, you would also want to be certain that the Power of Attorney remains valid throughout the transaction process. These requirements are in place to protect all parties relying on the Power of Attorney—not just the donor, but also third parties such as the buyer, the CPF Board, and the bank financing the transaction.
When Does a Power of Attorney Take Effect, and When Does It End?
A Power of Attorney takes effect from the date specified in the document, or when a situation mentioned in the POA arises, requiring the donee or attorney to perform the specified acts or deeds. A Power of Attorney can be worded to expire or end on a specified date.
Similarly, it can be set to end when a condition mentioned in the Power of Attorney is fulfilled, for example, once you return to Singapore and can handle your own affairs. You can decide to terminate or revoke the Power of Attorney, or when you want to replace the donee. You can revoke the Power of Attorney and apply for a new one. In this situation, it is important to notify the High Court of Singapore of the revocation and to register the new one.
If the donor passes away, becomes mentally unsound, or is bankrupt, the Power of Attorney will terminate. Since the donee’s powers are derived from the donor, those powers are interrupted upon the donor’s death, or loss of mental or legal capacity.
What is the Difference Between a Power of Attorney and a Lasting Power of Attorney?
As mentioned above, a Power of Attorney terminates when the donor lacks mental capacity. In contrast, a Lasting Power of Attorney (LPA) is a document signed by the donor while he/she has mental capacity, and it only comes into effect when he/she loses mental capacity, either temporarily or permanently. Like a Power of Attorney, a Lasting Power of Attorney must be signed in the presence of a witness, who can be a lawyer or a doctor or psychiatrist trained in witnessing the execution of legal documents. A Lasting Power of Attorney must also be registered, not with the High Court of Singapore, but with the Office of the Public Guardian.
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