08/05/2026
There are special considerations when selling property for an individual who has lost the capacity to make decisions for themselves.
Ideally all property owners have Enduring Powers of Attorney in place. These are important legal documents set in place with a lawyer while an individual (the donor) is of sound mind, authorising another person or persons to hold certain powers to act on the donor's behalf for the donor's benefit. These powers granted by the donor to their attorney/s can endure beyond mental incapacity, and amongst other things can enable the donor's appointed attorney/s to sign MSD Residential Care Loan agreements, property listing agreements and of course sale agreements in the event it is in the donor's best interests to do so, for instance to assist with payment of the donor's residential care costs.
There are unique matters to consider when entering into contracts as attorney for another person which do not necessarily apply when contracting for yourself. Protections and amendments to usual vendor warranties in a sale and purchase agreement should also be carefully considered with the assistance of expert advice.
At North Harbour Law we are seeing an increase in instances of property owners not setting Enduring Powers of Attorney in place and it then becoming too late for them to do so. This means there is no person with legal authority to facilitate a property sale, or to manage other assets such as bank accounts. This can cause a lot of stress for family members especially when care costs are accumulating. Applications must then be made to the Family Court to appoint a Property Manager under Court Order pursuant to the PPPR Act 1988. These applications are sometimes made by family members without lawyer assistance to try to avoid cost. What is sometimes not recognised however is that the default powers under a Property Manager appointment do not generally allow for the sale of a land property, and special application and Court permission is required to grant the Property Manager with such powers.
Like any significant transaction or decision, it is always prudent to obtain expert legal advice in good time to avoid unexpected cost, potential liability and stress. When it comes to selling a property - typically an individual's most significant asset - such advice should be taken prior to signing any sale agreement and ideally also prior to signing an agent's listing agreement, especially when contracting on another person's behalf as attorney or executor in the estate context.
At North Harbour Law we have a solid team of property and asset planning experts with a huge depth of local knowledge and experience. We have been serving generations of families on the Hibiscus Coast and beyond for almost half a century. We are here to help.
NorthHarbourLawHouse
3 Alice Ave
Ōrewa
www.northharbourlaw.co.nz
09 427 0550
[email protected]
