of the parties
- Buying an apartment in Israel
- Contract Structure
Power of attorney of the parties is important documents that must be signed in every transaction and transaction. Usually, the power of attorney is signed at the time of signing the sale agreement.
The buyer would do well to state in the power of attorney only the seller’s attorney in order to avoid a situation of conflict of interest if the attorney representing him is required to use the power of attorney when the buyer violates the agreement.
For example, Levy is a lawyer representing Reuven, who is buying an apartment from Shimon. If Reuven violates the contract, Shimon will require attorney Levy to delete a cautionary note recorded in Reuven’s favor. Here the lawyer may get into a dilemma.
If he deletes the cautionary note, he will be exposed to Reuben’s claim that he deleted the cautionary note illegally.
If he does not delete, then he is exposed to a lawsuit from Shimon who acted improperly. Failure to mention Adv. Levy’s name as a proxy invalidates this possibility.
It is recommended that each party appoint its proxy for a separate power of attorney, which each party will retain with its representative.
Thus, in the absence of power of attorney the parties will not have to summon the power of attorney every time they are required to sign a document during the execution of the agreement, but will use the power of attorney on their behalf.
For example, if Reuven wants to get a mortgage for the purpose of buying the apartment, he must have Shimon sign various documents. In this case, Yehuda’s lawyer will be entitled to sign the documents on behalf of Yehuda.
The power of attorney of the seller includes a number of components: the names of the sellers, the names of the buyers, the names of the attorneys of the power of attorney, the details of the apartment and the actions that can be used in the power of attorney.
On a practical level, the wording of the power of attorney will try to be extremely comprehensive in order to try and cover any situation that may arise during the life of the contract.
It should be borne in mind that various bodies, such as the courts and the Land Registry, require that the power of attorney explicitly state that the power of attorney authorized them to perform actions in those institutions, and also explicitly state the actions empowered to act on their behalf.
Therefore, a general wording of the power of attorney is not acceptable, such as “the power of attorney will be allowed to perform any action they request in connection with the transfer of rights between the seller and the buyer.”
In order not to be required to seek cooperation from the seller after signing the agreement, it is customary to include all actions that the power of attorney may perform under the contract. Hence, the strange and detailed wording of the power of attorney when explicitly stating every action and action that the power of attorney can perform through the power of attorney.
Unlike sellers who sign a broad power of attorney, buyers sign a narrower power of attorney. Buyers allow those with the power of attorney to erase or remove all actions they have taken under the contract to secure their rights. It is usually a matter of deleting a cautionary note registered in their favor at the Land Registry or deleting the mortgage registration registered in their favor or deleting a kind of cautionary note registered in their favor with the mortgage company or the Israel Lands Administration.
The power of attorney is held in trust by the parties’ attorneys.
The seller’s attorney holds the power of attorney of his clients and transfers them to the buyer against payment of the full consideration.
On the other hand, the power of attorney of the buyer is held by his proxy who is obliged to transfer it to the opposing party, if the buyers violate an agreement of the fundamental breach.
Sometimes, when there is no trust at all between the parties and the sellers fear that the buyer’s attorney will not act as aforesaid, the sellers insist that the buyer’s power of attorney be held with the seller’s attorney already at the time of signing the agreement.
In this case, the buyers will do well if they sign the power of attorney from the seller because he personally undertakes to act with the power of attorney only in accordance with the provisions of the sale agreement. And another protection that should be made in such a case, which will be written in the agreement that the power of attorney of the seller will be entitled to use the power of attorney only after giving 14 days written advance notice that he intends to use the power of attorney.
Thus, sufficient time will be left for the buyer to act to obtain an appropriate order from a court in such a way that the seller will not be able to use the power of attorney.