Mr Yuen, after inspecting a number of properties, settled on a flat at the Mid-Levels. It was owned by Mrs Chu, who had already emigrated to Australia. Three years before, Mrs Chu came back to Hong Kong for a short stay. Before leaving, she executed a power of attorney at her solicitor's office authorizing her nephew, Mr Ho, to deal with the flat at the Mid-Levels.
When the provisional agreement was signed, Mr Ho did not produce the power of attorney and only did so the day before the signing of the formal agreement for sale and purchase. After looking at the power of attorney, Mr Yuen's solicitor found that it only authorized Mr Ho to handle tenancy matters and did not give express power to Mr Ho for the sale of the flat. Moreover, it had been three years since the power of attorney was executed, and it could not be confirmed whether it had not been revoked.
Since doubts existed in the power of attorney, Mr Yuen, in order to avoid losses, refused to sign the formal agreement. Finally, with the agent's mediation, the parties agreed to postpone the signing for a few days to await a new power of attorney from Mrs Chu which would be sent to Hong Kong by courier. It was only after this was done that they completed the signing of the formal agreement.
To determine whether a power of attorney is in order, three things have to be considered: (1) whether the power of attorney is valid and has been properly executed; (2) whether the attorney and the powers given are clearly defined; (3) the validity period of the power of attorney, or whether or not it has been revoked.
If it is executed outside Hong Kong, there are other formalities. If executed in a member state of the Hague Conventions, it has to be signed in the presence of a local notary public. If it is not signed in a member state of the Hague Conventions, it has to be authenticated after notarization at the Chinese Embassy there. If it is signed in mainland China, it has to be authenticated by the Chinese Foreign Ministry after notarization.
Finally, a power of attorney executed less than 12 months ago is deemed not to have been revoked. Otherwise, the purchaser should request the owner to furnish additional proof of his authority to act on behalf of the owner.
All the three parties to the transaction, the vendor, the purchaser and the agent, should have a basic knowledge of power of attorney mentioned above so that the transaction may proceed smoothly and unnecessary disputes be avoided.
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