CASE STUDY IN RELATION TO POWER OF ATTORNEY
Before I start explaining on how Power of Attorney (“POA”) works in Malaysia, allow me to share a somber yet interesting experience on this matter .
Recently, I was approached by a client (“Mrs. B”) in relation to a POA which was signed by her Mother (“Grandma B”). We were informed by Mrs. B that 9 years ago, Grandma D was approached by a family friend who offered her a sum of RM30,000-00(mind you that 9 years ago this is considered a lot of moolah 💵💴💶💷💰) to sign a POA to irrevocably authorised Grandma B’s son-in-law (“Mr. A“) to deal with a land which belongs to Grandma B. Grandma B of course took the payment, signed it in good faith and had no idea what she was doing as she did not consult any lawyer.
Fast forward 9 years later, Mr. A is now using the said POA to dispose the 3 acres land belonging to Grandma D which is now valued at approximately RM 3.0 Million. It is not necessary to go into the details but suffice to say that the outcome of the POA was definitely not in Grandam B’ favour.
Trust me when I say this is not the first of its kind which I have personally encountered. Which is why I am sharing with you this article – Know your rights and Find Out More:
What is Power of Attorney?
- POA is a legal document which allows a person (referred to as the “Donor”) to appoint another person (known as the “Donee”), which authorises the Donee to act on behalf of the Donor in any dealings of physical or non-physical assets such as land, property, shares or intellectual property.
- It is a common practice in Malaysia for landowners to give out POA to developer to allow their lands to be developed by the developer.
- POA is also commonly used by the elderly to give out specific power or authority to his/her younger next of kin to act on his behalf to ease up any dealings relating to his/her land.
Is it possible for the Donor to limit the powers granted to the Donee?
- The answer is YES, the Donor may limit the powers granted to the Donee by specifying the extent of the power or any specific limitations which must be followed by the Donee.
- The Donor may specify the obligations, responsibilities and undertakings of the Donee in acting on behalf of the Donor and in carrying out his duty as the Donee.
What is the effect of a Power of Attorney?
- POA may enable a Donee to carry out certain dealings relating to the real or unreal property without having to obtain the Donor’s signature or consent, provided that the task is carried out within the powers granted by the POA.
- Please note that POA is a very powerful legal document. Usually, there will be a specific clause in the POA which renders the POA REVOCABLE OR IRREVOCABLE. An irrevocable POA means that neither the Donor’s intention to retract nor his death can revoke the registered POA. YES, POA will continue to take effect even after the demise of the Donor.
Therefore, when you are being approached by anyone pertaining to POA, PLEASE TAKE NOTE OF THE FOLLOWING KEY POINTS:-
- CREDENTIALS – ALWAYS check and conduct a due diligence on whether that person is legitimate, regardless of whether that person is a representative from a company, a broker or a property agent, it is always a good practice to check their credentials and intentions;
- ENGAGE A LAWYER – before you execute a POA, engage a lawyer to peruse the content of the POA. Even if the other party insisted that the POA was drafted by a lawyer, do not trust them blindly. It is better for you to incur some expenses at the beginning of the process rather than to regret later on for not doing it earlier;
- KEEP A COPY OF THE POA – A copy of the signed, stamped and registered POA must be given to you at the end of the process for your safekeeping. You are entitled to have a copy of that said POA;
The world is a beautiful place. However, always bear in mind that there are callous people out there who would always try to take advantage of your good intentions. So, the next time someone approach you and suggest Power of Attorney to ease up any dealings relating to your land, you should have some teeny-tiny-bits of ideas on what to do with it!
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