Selling a Property Under Power of Attorney: What Families Need to Know

A situation we encounter from time to time begins with a relatively simple telephone call. A parent has moved into residential care, their house is now empty and their children have Lasting Power of Attorney. The family understandably assumes that this means they can instruct an estate agent, put the property on the market and sell it, perhaps to help meet the cost of their parent's care.

In many cases, an attorney will indeed have the authority to deal with the property. However, having Power of Attorney does not necessarily mean that selling someone's home is as straightforward as it might first appear.

The first important consideration is exactly what type of Power of Attorney is in place. There are two types of Lasting Power of Attorney (LPA): one covering Health and Welfare and another covering Property and Financial Affairs. It is the Property and Financial Affairs LPA that can give an attorney authority to deal with matters such as bank accounts, investments and the buying or selling of property. A Health and Welfare LPA on its own does not provide that authority.

The documentation itself also matters. An LPA needs to have been registered before it can be used, and the document may contain instructions or restrictions governing what the attorneys can do. Where two or more attorneys have been appointed, it is also important to establish how they are required to make decisions. They may be able to act independently of one another, or the LPA may require them to make some or all decisions jointly.

Another common misconception is that somebody moving permanently into a care home automatically means they have lost the mental capacity to make decisions about their property. That isn't necessarily the case. Mental capacity is concerned with whether someone is able to make a particular decision at the time it needs to be made. Someone may therefore require residential care while remaining perfectly capable of making decisions about what happens to their home.

Where attorneys do need to make decisions on someone's behalf, they have important responsibilities. An attorney isn't being given ownership of the person's assets or simply being handed unrestricted control over them. They are expected to act in the person's best interests, follow the terms of the LPA and involve them in decisions as far as they are able.

This becomes particularly relevant when deciding whether a property should be sold and, subsequently, the price at which it should be marketed and sold. Attorneys should be able to demonstrate that they have acted appropriately and in the interests of the owner. Obtaining professional advice about the property's market value and retaining evidence of that advice can therefore be particularly important.

There are also circumstances where a proposed sale warrants specialist legal advice. For example, additional considerations can arise if an attorney or another family member wants to purchase the property themselves, if a sale below market value is being contemplated, or if the ownership of the property creates complications. Jointly owned properties can present particular issues, especially where one of the owners no longer has capacity, and in some circumstances further legal steps or involvement of the Court of Protection may be necessary.

None of this is intended to make families unnecessarily apprehensive about selling a property under a Power of Attorney. Thousands of properties are dealt with perfectly properly in this way. The important point is simply not to assume that possession of an LPA automatically answers every question about whether or how a particular property can be sold.

If you find yourself in this position, it is sensible to establish at an early stage what Power of Attorney is in place, whether it has been registered, how the attorneys are authorised to make decisions and whether there are any restrictions within the document. If there is any uncertainty about your authority to sell, the owner's capacity, the property's ownership or a potential conflict of interest, advice should be sought from an appropriately qualified solicitor before proceeding.

Once the legal position has been established, that is where an experienced estate agent can help with the practical property side of matters.

At Langford Rae Property Agents, we have been helping families sell homes across Orpington and the surrounding areas since 1986. We can provide an appraisal of the property, evidence of comparable sales, advice on an appropriate asking price and a marketing strategy designed to achieve the best result in the current market. We also understand that a sale prompted by a parent or relative moving into care can be very different emotionally and practically from an ordinary house move, and sometimes requires a little more patience and sensitivity.

If you are dealing with a property on behalf of a parent or relative and are unsure where to begin, you are very welcome to speak to our team. We can help with the property aspects and, where something falls outside our expertise, make it clear when specialist professional advice should be sought.

This article is provided for general information only and should not be relied upon as legal, financial or care-funding advice. Power of Attorney arrangements, property ownership and individual circumstances vary. Appropriate professional legal advice should be obtained where necessary before making decisions or taking action concerning another person's property.