CMB MAGAZINE cmba-achc.ca winter 2018 | 11
update
letters
CMBA MeMBers' views
Question
e borrowers, an elderly couple, have given
a Power of Attorney (POA) to their daughter
to allow her to purchase properties and
borrow funds under her parents' names. e
daughter has signed off a purchase contract
on behalf of the parents and would like me to
start a mortgage application. Her parents are
currently away in China. She would like to sign
the application form on behalf of the parents
to authorize the application and credit checks.
Would you please advise if this is acceptable?
Michelle Feng, MBA, CFP
Partner, Mortgage Consulting
smartyMORTGAGE
Answer
ank you, Michelle, for your question.
e following is not intended as legal advice; it
is our understanding of practice. You will need to
consult a lawyer if you want legal advice.
A POA binds the person granting it (the
grantor). It entitles the appointed attorney (the
grantee) to act in accordance with the grant
and in accordance with any restrictions on the
grant. However, no one is required to accept the
entitlement of the grantee to act as the attorney of
the grantor.
Many third parties, notably lenders and other
creditors, choose not to engage in a dealing based
on a POA; they are entitled to so choose. Some
may choose to engage in dealings based on POAs
but may require assurances, such as by a confirmed
current communication from the grantor to the
creditor. Others may choose to engage in dealings
based on the POA, without such assurances.
e cautious approach by some creditors
arises because courts have on occasion found fault
with POAs in subject cases. Issues such as the
proper interpretation of the POA (this can require
an in-depth interpretation of the wording of a
specific POA), the proper scope of the POA and
the mental competency of the grantor in granting
it sometimes arise. is can put a creditor at risk
concerning recovering the debt.
In your case, assuming the POA is legitimate,
the daughter would be entitled to act pursuant to
the grant and the restrictions. If the application
and the credit checks are in accordance with the
POA, there is no reason you could not accept
the signature of the daughter on behalf of the
parents in arranging a mortgage. However, while
a transaction within the terms of the POA is
possible, it may be more difficult to find a lender
willing to engage in a mortgage than would be the
case if no POA was involved.
Please feel free to contact us if you need
clarification or elaboration.
BCSC Exemption for Mortgage
Investments Entities (including
MICs) Extended
Question
I am aware that MICs were exempt
from registration with the BC Securities
Commission. Is the exemption still in place?
Mark Eikeland, CGA, Dip B.A. (Hons.)
President, Net Finance
Answer
I believe you will find the answer in British
Columbia Securities Commission Instrument 32-
517, titled "Exemption from Dealer Registration
Requirement for Trades in Securities of Mortgage
Investment Entities." It can be found at:
bcsc.bc.ca/Securities_Law/Policies/Policy3/
PDF/32-517__BCI___September_29__2016/.
Essentially, the exemption has been extended
to December 31, 2018.
note to readers: e exemption is
applicable only if certain conditions are
satisfied. You should review the above
link and other related material on the BC
Securities Commission website at bcsc.bc.ca
POWer OF AttOrney:
Don't take It for
Granted
