Irrevocable Power of Attorney (Vekalat-e Bela'azl)
2024-06-28
A power of attorney (vekalat) refers to a contract under which one party appoints the other as their representative to carry out a particular matter. This contract terminates upon the death of either party, the attorney's resignation, the attorney's removal (azl) by the principal, or the insanity of either the attorney or the principal, and in this respect there is no difference between an irrevocable power of attorney and an ordinary power of attorney.
An irrevocable power of attorney (vekalat-e bela'azl) is a "permissible contract" (aqd-e ja'ez) -- meaning a contract that terminates upon the death of either party, the attorney's resignation, the attorney's removal by the principal, or the insanity of either the attorney or the principal. For example, if a person grants another power of attorney to purchase a car for them, the person granting the power of attorney is called the principal (mowakkel), and the person who must carry out the car purchase is called the attorney (vakil). Now, if the attorney becomes insane, dies, or resigns from carrying out that act before purchasing the car, or if the principal removes them, the attorney will no longer be permitted to carry out the car transaction.
Conditions of an Irrevocable Power of Attorney in Property Sale and Purchase
Sometimes, for reasons such as the property transfer process being time-consuming or costly, the title deed being unavailable, or the seller being in a hurry, the deed is not issued in the buyer's name, and instead an irrevocable power-of-attorney contract is concluded between the buyer and seller, under which the seller appoints the buyer as their attorney to handle matters related to the deed, such as obtaining registry inquiries and municipal settlement-of-account certificates, and ultimately registering the deed.
In these circumstances, pay attention to the following points: an irrevocable power of attorney does not mean that the buyer can have the deed put in their own name whenever they wish. It means, rather, that the seller personally cannot rescind the power of attorney. This contract becomes void upon the death of either party, the insanity of either party, or the attorney's resignation. It is therefore best to use this type of power of attorney only for administrative matters, and if you are buying or selling a property through a power of attorney, you should convert it into a final deed as quickly as possible. Under an irrevocable power of attorney, the principal can still personally carry out all matters relating to the transaction, and this right is not taken away from them. So if you want all matters to be handled solely by the attorney, you must explicitly state in the power-of-attorney document that the principal has no right to intervene in or carry out these matters. Under an irrevocable power of attorney, if the principal dies and the buyer has not yet had the purchased property's deed put in their name, the deceased's heirs must act to transfer and sign the official deed, because the contract is dissolved upon the principal's death. So be careful to complete the deed-registration process quickly. Also make sure that the power-of-attorney document you draft up has a time limit. It is best to avoid using this type of power of attorney for inheritance-related transactions or for transactions involving more than one principal as joint partners. As long as you have not registered the deed, even after purchasing a property through an irrevocable power of attorney, you are not the owner of the property. In these circumstances, the seller retains the right to sell the property to someone else. So be sure to draft a sale agreement (mobayeh-nameh) at the same time as the power-of-attorney document, and, in the power-of-attorney document, withhold from the seller the right to sell the property to another person. By drafting a sale agreement, you establish yourself as the property's owner, and you will be able to prove this in court if any problem arises. Because granting a power of attorney does not, under the law, deprive the grantor of ownership, until the final transfer deed is executed, the principal -- i.e., the seller -- continues to be recognized as the owner. In this situation, the seller's creditors can easily seize, and ultimately have transferred, the property over which you hold an irrevocable power of attorney. Enforcement of a mahriyeh (dower) claim against such property is quite common!
What Documents Are Needed to Draft a Power-of-Attorney Document?
To draft a power-of-attorney document, the national ID card and birth certificate of both the attorney and the principal, along with copies of these, are required. If the power of attorney is being granted for the purchase or sale of a vehicle or property, the deed and documents proving the principal's ownership must be presented to the notary's office. That is, for any right that the principal intends to grant to the attorney, documents proving that the principal holds that right must be presented. Matters to observe in an irrevocable power-of-attorney document: read the power-of-attorney document carefully. Write out every matter you wish to specify in full detail. In large transactions conducted through a power of attorney, the validity of the power-of-attorney document must always be verified in writing, before the transaction, with the notary's office that drafted it. It is best to use an irrevocable power of attorney only for administrative matters, and, if you are purchasing a property, to convert it into a final deed as soon as possible. To draft a power-of-attorney document, you must go to an official notary's office. Your power-of-attorney document must be in writing and registered at an official notary's office; otherwise, your power of attorney is void and not legally valid. Prepare two copies of the power-of-attorney document: one copy held by the seller and one copy held by the buyer. Never enter into power-of-attorney transactions with people you do not know.
Points About Irrevocable Powers of Attorney
First point: although an irrevocable power of attorney is not a simple power of attorney and is considered among the non-rescindable, stable types of power of attorney, in terms of its legal nature it remains a "permissible contract" and, like an ordinary power of attorney, is dissolved and ceases to exist upon the death or insanity of either party -- it no longer has practical value and becomes void, and even if this power of attorney has been delegated multiple times, it will still cease to exist for these same reasons. However, if the attorney has purchased property from the principal under a sale contract and has also obtained an irrevocable power of attorney for the sale from the principal (seller), then, for example, if the principal dies, even though the irrevocable power of attorney becomes void and ceases to exist, this does not amount to a forfeiture of the attorney's (i.e., the buyer's) right, and their ownership remains intact, because they had already become the property's owner under the prior sale contract. In this case, the principal's heirs must officially transfer that property to the attorney.
Accordingly, it is necessary that, after obtaining an irrevocable power of attorney for sale with respect to real estate or a vehicle, people promptly proceed with the final, official transfer at a notary's office without the principal (seller) being present -- because, for example, upon the principal's (seller's) death, that power of attorney no longer has any value, and the deceased's heirs must then act to transfer and sign the official deed, a process that is time-consuming and fraught with numerous difficulties.
Second point: some people enter into transactions through an irrevocable power of attorney and believe that, through it, the property has been put in their name and that they have obtained ownership; this belief, however, is mistaken and incorrect, because an irrevocable power of attorney merely means that the attorney has representative authority from the principal to carry out the subject matter of the power of attorney; it does not amount to a transfer of that subject matter, and no one can claim ownership on the basis of an irrevocable power of attorney unless it has been transferred to them under a contract such as a sale, settlement (solh), or gift (hebeh).
Accordingly, in buying and selling their property, people must always carry out the transaction in the form of a sale contract and establish their own ownership, because if someone carries out a transaction through a power of attorney without a sale contract having been drafted, and the principal then dies, then, as noted above, the power of attorney ceases to exist, and the attorney will apparently no longer be able to prove ownership on the basis of that power of attorney, and proving ownership becomes difficult -- unless the attorney can prove their ownership through other evidence and documentation.
Third point: although an irrevocable power of attorney, in most cases, serves the purposes of the parties to the contract and has certain advantages, in some cases it carries fundamental consequences and problems, and, by signing an official irrevocable power-of-attorney document, people may unintentionally lose all of their property and assets. This happens due to a lack of sufficient knowledge and awareness about irrevocable powers of attorney. Accordingly, citizens are advised to exercise the necessary care in granting an irrevocable power of attorney to any person or persons, so as not to run into problems in the future -- because some people commit fraud through this very mechanism.
Accordingly: first, an irrevocable power of attorney should be granted for specific, limited matters rather than general ones; second, the subject matter of an irrevocable power of attorney should be carefully read and reviewed by both parties and should be stated to be exactly the matter the parties intend; and third, this type of power of attorney should, in principle, be granted only in special cases -- for example, with respect to property that has already been transferred to the attorney.