IS YOUR SPA ( Special Power of Attorney ) EXPIRED ? _____________________________________________________________________________

At one point in time, you may have encountered a transaction involving the use of a “SPA” or, a Special Power of Attorney. This is generally used in case the person, whether the seller or the buyer would or could not be physically present to enter into the sale agreement and sign or execute the document, be it a contract to sell or deed of absolute sale.

In real estate transactions, an agent or attorney-in-fact must have a special power of attorney from the principal (seller or buyer) to be able to into any contract by which the ownership of an immovable is transmitted or acquired either gratuitously or for a valuable consideration. (Article 1878, New Civil Code, NCC)

However, in some cases you may encounter that the Special Power of Attorney being presented by the seller (or the buyer) is more than one year old or, even several years old.

At that instance, the question that one might ask is, “ Is that SPA still valid ? ” or, “ Is that SPA expired? ”

The issue of the expiration of the SPA is governed by the laws on agency, more particularly, Article 1919 of the New Civil Code, which provides that :

“Art. 1919. Agency is extinguished:

(1) By its revocation;

(2) By the withdrawal of the agent;

(3) By the death, civil interdiction, insanity or insolvency of the principal or the agent;

(4) By the dissolution of the firm or corporation which entrusted or accepted the

agency;

(5) By the accomplishment of the object or purpose of the agency;

(6) By the expiration of the period for which the agency was constituted.

Whether the SPA is still valid or, if it has expired depends therefore on several grounds.

As to the expiration of the SPA, the general rule is that the SPA, even if it was executed several years ago, continues to be valid and you may still use the same in the real estate deal that you are working on.

You could however look into certain conditions that will affect the validity or “expiry” of the SPA, such as:

1. If the SPA provides an expiration date. In some instances, the special power of attorney contains a provision that it is only valid for a certain period, for example, only for one (1) year. In such a case, the SPA expires within that date and no longer has any effect or validity beyond such period as the authority given has expired.

2. It may still happen, or you might find out that the principal has died, in which case, the general rule is that agency is likewise extinguished or simply put, the SPA dies along with the principal and is no longer valid. (Although it could be one which is still effective even upon death of the principal, though this is an exception rather than the general rule.)

3. If the principal has revoked the agency, or the special power given, in which case you must ascertain that no revocation has been made by the principal. (Or it is one which cannot just be revoked by the principal.)

Of course, if it is possible to obtain another SPA which is current or recent, then it may be best to have another SPA executed if the other party insists on a more recent SPA.

What’s important is that, the SPA, just because it was executed several years ago, does not automatically become “stale”/expired unless certain conditions discussed above arise.

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Republished from PAREB REALTORS^® Bulletin
ATM/ ^© Copyright 2007