For most families in Israel, the apartment is the main asset. When a parent can no longer manage his affairs, practical questions arise quickly: can the apartment be rented out? Sold to fund assisted living? Can the mortgage be refinanced? A well-drafted continuing power of attorney can answer these questions in advance.
What can the attorney do with the apartment?
Everything depends on the powers set in the document. A continuing power of attorney for property can include day-to-day management (municipal tax, building committee, repairs), renting, selling, buying, taking a mortgage and registration actions. It is worth stating explicitly whether selling the apartment is permitted, and under what conditions.
Why write directives about the apartment?
- Use of the money: if the apartment is sold, what will the money be used for? Care, assisted living, or saving for the future.
- Living arrangements: whether you wish to stay at home as long as possible, even at the cost of a live-in caregiver.
- Family members living in the apartment: what happens to a spouse or child who lives there.
- Consistency with your will: selling an apartment left in a will to a specific heir may change how the estate is divided. See continuing power of attorney and a will.
Conflict of interest: when the attorney is also the buyer or tenant
A common situation is a child who is also the attorney and wants to buy the apartment, live in it or rent it to himself. An action in which the attorney has a conflict of interest may require explicit authorization in the document or court approval. It is better to address this in advance.
Dealing with the bank and the Land Registry
Banks and the Land Registry will want to verify that the power of attorney was deposited and has come into force, and that the action is within its powers. Clear drafting prevents delays. Before a transaction, also check the property’s land registry extract.
What if there is a mortgage?
If there is a mortgage on the apartment, the attorney will need to handle payments and the bank. Actions such as refinancing or a new loan should be mentioned explicitly, so there is no doubt about the authority.
Where do you go from here?
Every person and every family is different, so a good continuing power of attorney is built around the assets, the family relationships and the wishes of the person granting it. At Paz Israel & Co. Law Office we draft continuing powers of attorney and advance directives, and we also support families when the document comes into force. For more information see our continuing power of attorney page, or contact us to schedule a meeting.
This article provides general information, is correct as of the time of writing, and does not constitute legal advice or a substitute for reviewing your specific circumstances.