What happens if for one reason or another, you are unable to be directly involved in a land-purchase transaction? Can you appoint a representative to handle the same for you? You can easily appoint an attorney by a power of attorney. In this article, we seek to discuss the concept of powers of attorney at great length.
What is a power of attorney?
Power of attorney is a legal instrument by which a person appoints another to act on their behalf in matters including those relating to dispositions of land. This creates a donor-donee relationship, the donor being the appointing party and the donee being the appointed party.
Validity of a power of attorney
It is important to note that both mental capacity and age are key factors in deciding the validity of a power of attorney. Mental capacity – Only a person of sane mind can grant the power of attorney. In the case of Grace Wanjiru and another vs Gideon Waweru a power of attorney granted by a person of unsound mind was deemed null and void. Age – The parties have to have attained the age of majority, that is 18 years and above.
Contents of a power of attorney?
The power of attorney should contain:
- Description of both the donor and done
- Scope of the power of attorney
- Execution and verification page – where the donor and donee sign and the same is verified
What are the different forms of the power of attorney?
There are three forms of powers of attorney, and they include; general, special and irrevocable powers of attorney.
- General power of attorney – the permission given to the donee is broad, for example; the power to act on behalf of someone in all issues to do with finance among others.
- Special power of attorney – the permissions given to the donee is limited.
- Irrevocable power of attorney – cannot be revoked/terminated unless both the donor and done agree to the arrangement. This is common in situations where the person being represented is; a minor or is insane.
Execution and Registration of the Power of Attorney
- The power of attorney must be executed by each of the parties consenting to it. This is done through appending a signature or thumbprint or any other mark of evidence of personal acceptance. (Sec 44 of the Land Registration Act)
- Once that is done, the executing parties appear before the registrar with a witness for verification. (Section 45 of the Land Registration Act)
- Registration then occurs when stamp duty is paid in regards to the Power of Attorney stamp duty and the Registrar makes an entry in the Register of Powers of Attorney under the Registration of Documents Act.
Foreign Powers of Attorney
For a foreign Power of Attorney to have authority in Kenya, it must be registered here in Kenya even if it is procedurally duly registered in its country of origin. A Notary Public stamp from the embassy of the country of origin in Kenya will be required to verify its authenticity. If it is in another language, a Certificate from the country’s embassy verifying the interpretation must be obtained and presented.
Companies and Powers of Attorney
A power of Attorney can be issued by and given to a company. If the Power of Attorney has been issued by a company, a copy of the Memorandum and Articles of Association of the company and a company resolution authorizing the same must be presented. The Power of Attorney must be executed under Seal.
As demonstrated above, the process of appointing a preferred representative to handle transactions on your behalf is relatively easy. At Optiven Limited, we have in-house Advocates who shall guide you through the process to ensure that you become a land-owner with the ease.
DEED OF NOVATION
Let’s say you would like to substitute an existing party to an already existing contract. Does this mean that you have to terminate or negotiate terms for a new contract? This is can be simply remedied by a deed of novation. In this article, we seek to discuss the deed of novation at great length.
A deed of novation transfers one party’s rights, risks, benefits and obligations contained within a contract to another third party. It is important to note that the terms of the original contract remain unchanged. It is only that the identity of one party is being substituted with a third party. The third party then assumes all the legal responsibility under the contract. The original party is released from all future risks, rights and obligations under the contract.
Contents of a deed of Novation
The following are contained in a deed of novation:
- Novation or effective date – the date from which the novation applies to the parties;
- Release – a clause releasing the original party from all performance of the contract from the novation date;
- Representations/warranties – any representations or warranties made by either party; and
- Fees – any fees or payments to be made by either party.
Difference between novation and assignment
An assignment is where the contractual rights and benefits (but not the obligations) of one contractual party is transferred to a third party. This differs from novation where the rights, risks and obligations of one party are transferred to another third party.
As demonstrated above, you do not have to terminate or negotiate terms for a new contract when you simply want to substitute an existing party with another third party. For more information, kindly contact the Legal Department at Optiven Limited.
Disclaimer
The content of this document is intended to be of general use only. For specific legal advice on Optiven Limited Real Estate Investments please do not hesitate to reach us through the contact details below.
Email: legal@optiven.co.ke
Tel: 0720-919111
