Legal powers of attorney require precise definition of the agent’s authority to avoid granting powers that exceed the actual intended purpose.
Poorly drafted broad powers of attorney can create loopholes that allow the agent to dispose of assets beyond the principal’s intent. This makes it essential to strike a balance between procedural flexibility and the protection of legal rights.
What Is a Broad Power of Attorney?
A broad power of attorney refers to a legal document that grants the agent the right to carry out financial, administrative, and judicial acts without specific subject-matter or time limitations.
Such a power of attorney allows the authorized party to make significant decisions, including selling, purchasing, and contracting on behalf of the principal. As a result, the scope of authority becomes open-ended and directly impacts the principal’s financial estate.
Risks of a General Power of Attorney on Your Assets
The risks of a general power of attorney increase when authority goes beyond control. Key risks include:
- Loss of real estate assets: The agent may sell property to themselves or to third parties without referring back to you.
- Unexpected financial liabilities: The agent may borrow against your assets or sign cheques and promissory notes, exposing you to legal responsibility.
- Lack of oversight: Major legal decisions may be made in your absence, sometimes discovered only after it is too late.
When Do Powers Become “Excessive”?
Authority becomes excessive and unsafe when the document includes the following phrases without restriction:
- “Sell and transfer to self and others” – This is one of the most dangerous clauses, as it allows the agent to transfer ownership directly to themselves.
- “Sign before all authorities” – Without specifying the type of transactions.
- Opening and closing bank accounts – Giving the agent full control over your liquidity.
- Right to appoint substitutes (sub-delegate authority) – Meaning you may end up with an “agent of the agent” whom you neither know nor trust.
Common Drafting Mistakes
Many people fall into drafting errors due to urgency or excessive trust, such as:
- Using ready-made templates that include all clauses without removing unnecessary provisions.
- Failing to specify property numbers or account numbers precisely, instead using general phrases like “all my assets.”
- Not setting an expiration date, allowing the power of attorney to remain valid for many years.
When Open-Ended Powers of Attorney Should Be Avoided
A broad power of attorney is unsuitable in the following situations:
- When the purpose is limited to a simple administrative task (e.g., obtaining a license or paying fees).
- In family disputes or inheritance matters, where it is preferable to issue separate, task-specific powers.
- When dealing with agents who do not have a documented, ongoing professional relationship with you.
Legal Ways to Restrict the Agent’s Authority
To protect yourself, consider the following safeguards:
- Clearly specify the type of task (e.g., authority to manage a specific property, not to sell it).
- If appointing multiple agents, require joint signatures for financial transactions.
- Set a financial limit that the agent may not exceed in sale or purchase transactions without written approval.
How to Review and Reduce an Existing Power of Attorney
If you believe your current power of attorney grants unsafe authority, you may:
- Issue a Declaration Restricting Authority, linked to the original document.
- Fully revoke the existing power of attorney and issue a new one with clearly defined, limited powers that reflect your current needs.
Steps to Revoke a Broad Power of Attorney
Do not hesitate to revoke a power of attorney if the need has ended or trust has been lost. The steps include:
- Visiting a notary public to complete the revocation officially.
- Formally notifying the agent that their authority has ended.
- Sending a copy of the revocation to banks and the Land Department to prevent further use.
Frequently Asked Questions
Can an agent sell to themselves without explicit wording?
No. The power of attorney must expressly include the phrase allowing sale to self and others for such action to be legally valid.
How can a power of attorney be revoked if the original paper copy is lost?
By visiting the notary and requesting revocation using the registered POA number in the electronic system.
What is the safest step after officially revoking a power of attorney?
Serving formal legal notice to the agent and informing banks and the Land Department of the revocation.
Protecting the principal legally begins with clearly defining the scope of authority and avoiding drafting mistakes that open the door to misuse.
Awareness of the risks of general powers of attorney and proper restriction of the agent’s powers ensures your assets remain secure—whether through amendment or prompt revocation once the need for broad authority ends.
Do not leave your assets exposed to legal loopholes. Contact us today to ensure your powers of attorney are handled securely.
Private Notary Dubai
Mobile: +971 56 232 7778
WhatsApp: +971 56 232 7778
Email: info@privatenotarydubai.ae
Address: Office No. 805, Opal Tower, Business Bay, Dubai, UAE