Dec 19

Interpretative decision on the minimum content of disposition transactions power of attorney

  By order of the Chairman of the Supreme Court of Casation interpretative case No 5 of 2014 of the General Assembly of the Civil and Commercial Chamber of the SCC has been initiated on the matter of the minimum content necessary for the power of attorney aimed at transactions of disposition of property of the principal, so that there is valid authorization.

  The cause of the proposal and subsequently the initiation of this interpretative case is the existence of conflicting case law under Art. 290 of the Civil Procedural Code on the main issue of the case. According to one of the two main opinions adopted in case law validly established representative power only requires the power of attorney to enable the proxy to dispose of the property of the principal through certain disposition transactions - sale, donation, mortgage, etc. According to this opinion it is not necessary for the power of attorney to contain specifics regarding the mandatory content of the transaction, and in the case of sale – the purchase price. On the other hand, according to the other opinion advocated in case law the power of attorney for the disposal of real estate should contain full individualization of the property, the mandatory content of the transaction and in the case of sale - the price. According to proponents of this opinion a proxy transaction made without compliance with these requirements constitute acts without authorization, not legally binding the represented person.

  The extremely widespread practice of disposing of real estate via a proxy determines the future direct dependence of such transactions on the upcoming interpretative decision on the content of the power of attorney, which is why the outcome in interp. case No 5 of 2014 of the SCC will be of great importance, both for lawyers and law firms practicing in the field of real estate and transactions with it and all persons/ companies who are to be partys to transactions with real estate via proxy.