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PoA or Power of Attorney is an agreement or a written legal contract between 2 parties, either individuals or companies, where one party authorizes another to represent them and act on their behalf. The PoA can be used by UAE residents who are not able to perform actions that require their physical presence. Non-UAE residents also often use a PoA when they are required to be legally present while conducting either personal or business matters. There are numerous benefits of using a PoA, from saving you time and money you would have to spend on frequent trips and accommodations, to sparing you the inconvenience of doing everything yourself and having to take time off work to do it. In this article, you will learn when a PoA can be used and by whom in relation to the real estate purchase transaction, and what the requirements are.
There are different types of PoAs in the UAE each with a different purpose and legal implications that come with it. The most common type of a PoA is the General PoA, which covers a broad range of authorized actions, and there is also the Special PoA, which is an authorization issued for a specific purpose and focused on a limited set of actions that can be performed on the principal’s behalf (the person giving the authorization).
General Power of Attorney- the following are actions that can be authorized with this type of PoA:
Special Power of Attorney- the following are different types of special PoAs that can be issued:
Property Power of Attorney- this type of PoA focuses on property transactions and management:
When it comes to the sale of personal assets and property, the UAE government sets certain restrictions on who can be authorized to do what. Under the General PoA, only close family members (father, mother, son, daughter, or siblings) can be authorized to sell the principal’s assets or property. All other persons can only be authorized for a specific property and action under the Special PoA. In Abu Dhabi, however, the General PoA will not authorize anyone, not even immediate family members, to sell the principal’s assets. This can only be covered by the Special PoA tied to a specific property.
For property purchases in Dubai, a General PoA will be enough for a close family member; however, anyone else will require a Special or Property PoA. Some sources say that real estate agents or brokers can not be issued a PoA to buy a property in your name and others state that it is allowed as long as the authorized agent confirms all actions with the principal before they carry them out. It’s important to be sure that the authorized person will always have your best interest in mind and will never abuse the PoA for their own personal interest. Regarding mortgage brokers, there is no specific rule against them being authorized as long as it’s a separate person and not the same individual signing the mortgage agreement as your broker.
Aside from family members and friends you can trust, most sources advise authorizing a lawyer or hiring a legal company to execute the PoA for you. As legal persons and entities, they are bound to respect the UAE rules and regulations and represent the most trustworthy third party for such a situation.
Let’s go over some of the key provisions of a typical PoA in the UAE: