| Photo courtesy of ACSLaw.org
There are industries that are distinctly characterized by its clientele activities and profile. Before I could even muster to familiarize clients’ full details or their business interests, they have already left for some trips in Asia and are returning back in a few days and after just making the reservation for a unit, have flown back to their international countries of origin. For many International Property Specialists and brokers, it is just a common scene in real estate especially dealing with the international market.
I can tell you that the 30 minutes the client is spending with any agents in looking at a property in showrooms or some actual properties is worthwhile or even a long trip outside Manila. A tripping is a focal activity to sales transactions. The worst thing that can happen to an agent is still negotiating the discounts, perusing computation details while the client’s airplane is about to take off. It happens a lot of times.
Many clients are not always available after they made their purchases and cannot guarantee presence in accepting their units upon turn-over. Needless to worry, a client is represented by an assignee to advance clients’ interests in his absence ergo, an Attorney-in-Fact (AIF) through Special Power of Attorney (SPA).
” … a client is represented by an assignee to advance clients’ interests in his absence ergo, an Attorney-in-Fact (AIF) through Special Power of Attorney (SPA).”
International buyers are unique in that due to distance, they rely on close relatives and friends for some important transactions. Even if they are physically present in reservation transactions, there are other things that they could not be available for other related meetings or decisions related to their property. This is where an AIF via SPA comes in, with much value to the purchasing party. You too, may need one. AIF/Agents are individuals who you place your trust in their decision making on your behalf.
An SPA is a written document wherein one person (the “Principal”) appoints and confers authority to another (the “Agent”) to perform acts on behalf of the principal for one or more specific transactions. It is used as evidence of authority of the Agent to third persons with whom the Agent may be dealing with.
“An SPA is a written document wherein one person (the “Principal”) appoints and confers authority to another (the “Agent”) to perform acts on behalf of the principal for one or more specific transactions.”
An SPA may generally be used to delegate any act that the Principal may do himself. However, acts that are required by law or public policy to be done by the Principal personally cannot be delegated to an Agent. Likewise, illegal acts cannot be delegated since the law prohibits illegal acts to be done by the Principal personally.
Please do not be confused by the SPA from General Power of Attorney, in that it can be used to transact all the business of the principal on a broader scale. However, said transactions are limited to acts of administration while SPA is for a specific task to be done by your representative. SPA is also needed on some transactions specified under the Civil Code of the Philippines, e.g. selling of real property by an agent requires an SPA.
An SPA is used when the Agent/AIF is authorized to act only in one or more specific transactions or to do one or more specific acts or to act only during a specific occasion such as: to make payments that are not usually considered acts of administration; to end an existing obligation by the creation of a new one by substituting the object of the obligation or the parties to the obligation; to enter into a compromise to avoid a litigation or to end one that has already started; to waive any obligations gratuitously (or freely); to enter into a contract where the ownership of a real property (e.g. land) is changed either gratuitously or with a consideration; to make gifts except customary ones for charity or those made to employees in the business managed by the Agent; to loan or borrow money unless the borrowing of money is urgent and indispensable for the preservation of the things which are under administration.
Additionally, an SPA may cover the following: to lease any real property to another person for more than one year; to bind the principal to render some service without compensation; to bind the principal in a contract of partnership; to bind the principal as a guarantor or surety; to create or convey real rights, such as mortgage, usufruct, easement, etc., over immovable property; to accept or repudiate an inheritance; to ratify or recognize obligations that were entered into before the agency; any act of strict dominion such as selling or purchasing personal property.
In my first few deals, I soon knew how important an AIF is, in fact they are both the confidant and the advocate to the principal. I have had great encounters with AIFs. I remember maintaining a relationship with one by giving out an aircon unit, as a concession to the client through the AIF They also can accept turn-over of the unit and are incredibly involved with the punch listing or property inspection.
“AIFs provide tremendous value to the owner. I know of some instances that principals buy properties without seeing the property (land or condo) by mere recommendation only of their AIF.”
AIFs provide tremendous value to the owner. I know of some instances that principals buy properties without seeing the property (land or condo) by mere recommendation only of their AIF. They are able to relay the info and offer important feedback to the clients but the best value that an AIF offer is the direct communication and authority obtained from the principal, validating the decision-making necessary in the business of property ownership.
As high-rise developments have turn-over dates, SPAs are not always required in property purchases but are needed upon client’s willingness to appoint one especially for absentee owners but for loan purposes it’s a must for those who are based outside the Philippines and require financing from a Philippine bank. In the case of PNB New York, they do not require a SPA from the Philippines. SPAs for properties can be upon purchase or after one owns the property already.
Many of us are hands-on with our purchases however it offers great help to have relatives, friends or business partners that can represent you in your needs for representation.
AIFs are especially important to be able to follow your instructions such as whether the terms of contracts are followed, even the minor turn-over issues or to a great extent make or break a deal. It is just more seamless to have somebody coming to your interests with your business requirement. An SPA as a document is also of paramount importance in loans and other processing with your property purchase.
You cannot underestimate the value that an SPA provides in the business dealings. You can be represented by an AIF in capacities above, all to your advantage as the principal to the real property. Even with the saying “No man is an island,” it holds true in real property dealings.
(Stevenson’s experience in Philippine Real Estate spans more than 15 years. He has been involved in horizontal, vertical, vacation and commercial properties. He has worked as an International Property Specialist to markets in Asia, Europe and North America with Ayala Land, Federal Land and Century Properties. Through PhilHouseHunters, he offers real estate investment opportunities, marketing, and consultancy with a key focus to Metro Manila and Mega Cebu areas. Visit www.philhousehunters.com. Email at email@example.com.)