Powers of Attorney
Recent claims experience in Australia and overseas has indicated that the fraudulent use of powers of attorney is a significant risk. Accordingly, whether you act for a vendor, purchaser or borrower, it is important to carefully scrutinise powers of attorney being used in transactions when you:
- did not meet with the attorney and donee personally; and/or
- did not prepare or witness the power of attorney yourself.
A proper review of a power of attorney includes not 
only ensuring the proper form and execution of the power of attorney document, but also examining the reasoning behind its use, and verifying the identity of the party(ies).
When you act for a purchaser and you are aware that the vendor is using a power of attorney, you must obtain and review the power of attorney to ensure its validity on its face. Additionally, it is of utmost importance that mortgage funds being obtained by way of power of attorney be paid directly into the name of the donor and not the attorney.
Recent case law in New South Wales indicates that if funds are being paid to the attorney (regardless of whether the power of attorney document authorises the attorney to receive a financial benefit from the transaction), then the donor must be contacted to ensure that the donor consents.