When dealing with any type of property transaction, a conveyancer must always keep in mind the principles of the Mental Capacity Act 2005 and the rules and guidance relating to sale of property by an Attorney or Deputy.
When a home owner loses capacity, a property may be sold on their behalf if a relative, friend or relevant professional has sufficient authority to proceed with the transaction. A conveyancer must, as with all due diligence, check the identity of the instructing party and whether they have authority to sell the property.
The starting point is that capacity must always be presumed however if in doubt, a two-stage test must be applied:-
1. Does the person have an impairment of their mind or brain, whether as a result of an illness, or external factors such as alcohol or drug use?
2. Does the impairment mean the person is unable to make a specific decision when they need to?
Capacity is time and decision specific therefore an individual may have capacity about one specific decision but not another. In order to have capacity to make the decision, the person must be able to understand information in relation to that decision, retain the information, weigh up and communicate that decision.
If there is an existing Lasting Power of Attorney in place, this does not automatically authorise the attorney to sell property on behalf of the donor. The conveyancer needs to ask the question: does the home owner/donor have capacity to instruct a solicitor to sell the property? If the answer is yes then the donor may authorise the conveyancer to correspond with the attorney however the conveyancer must always ensure that the donor understands the transaction throughout.
Where the home owner doesn’t have capacity and did not make a Lasting Power of Attorney while still capacitous, there may be a court appointed Deputy. If there is a Deputyship in place then the conveyancer must be mindful that not all orders automatically authorise the Deputy to sell the property. There is usually a section which either explicitly includes or excludes authority for the Deputy to sell the property. If there is not authority then the Deputy must make a separate application to the Court of Protection to obtain the necessary authority.
If, as a conveyancer, you are in doubt regarding capacity or authority then it is always best to err on the side of caution and obtain advice from a specialist in this area.
If you are selling a property as an Attorney or Deputy, contact our Conveyancing team to find out how we can help by calling 0808 1685 643, fill out an online enquiry form, or email getmoving@ramsdens.co.uk, and we will be in touch.