Does a power of attorney lapse in death?

“My uncle is retired and spends a large part of his time travelling overseas. Because he is often out of the country, he provided me, through a Power of Attorney, with the authority to conclude a sale transaction of his beach house on his behalf. A good offer was made which I accepted and signed the agreement of sale. Unfortunately, my uncle tragically passed away but before the property has been transferred. The buyer wants to continue, but I’m unsure whether I can still represent my uncle now that he is deceased?”

It is a general principle in our law that no person may act on behalf of another, unless he has the necessary authority to do so. Such authorisation is commonly referred to as a Power of Attorney (“POA”). 

A POA is a formal document in terms of which the principal (the person who provides the authority) empowers an agent (the person entrusted with the authority) to conclude certain juristic acts on his behalf. 

A validly authorised agent may perform all of the actions (but not more) set out in the POA, on behalf of his principal and the principal will be bound thereto. The signing of a POA does not only authorise the agent to act, but also informs third parties that the principal intends to be bound by the acts performed by his agent.

In terms of our law, an agent may only perform such acts as the principal himself has the legal capacity to perform. Accordingly, a POA is automatically and by legal implication revoked when the principal becomes mentally incapacitated, insolvent or passes away. In the case of the death of the principal, the reasoning is that the deceased person cannot conclude any juristic acts anymore and so the authority conferred on the agent to perform juristic acts, also ceases on the death of the principal. This will be the legal position, irrespective of the wording of the POA, even including attempts to cater for the situation of the death of the principal. 

In your situation, your late uncle’s estate will need to be reported to the Master of the High Court and an executor will be appointed to administer his estate. Because of your uncle’s death, your POA will accordingly have ceased. However, since you signed the agreement of sale before your uncle passed away, the POA was valid at the time and the contract will be binding on the executor, subject to certain exceptions. The executor would now have to take over the responsibility to honour the agreement of sale on behalf of your uncle and do the necessary to transfer the property to the buyer.

It is recommended that you make contact with the executor of your uncle’s estate and explain the situation as well as the agreement of sale. If necessary, you can also ask your attorney to assist you to review the POA and sale agreement and liaise with the executor of the estate on your behalf.

April 6, 2018
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