Agents warned to tread carefully on Court of Protection sales

Agents are being urged to take extra care when dealing with sales on behalf of someone who lacks mental capacity.

Kate Stockdale, senior associate in the residential property department at Wilsons Solicitors, warns that there has been a change in the attitude from the courts around the authority given to deputies who are acting on behalf of someone else.

A deputy is a person who has been appointed by the Court of Protection to act on behalf of someone without mental capacity.

This is often to manage someone’s financial affairs where there is no power of attorney but Stockdale warns that it doesn’t always extend to property sales.

She said: “The courts are no longer giving authority for the Deputy to purchase or sell a property in the original Deputy Order and there has been a huge increase in the number of applications being made for further authority.

“It is important to remember that people can lose the capacity to decide to sell a property for many reasons, and it is not just those who's cognition has declined in their later years. 

“Other examples include children impacted by negligence on the part of hospital at birth or someone who sustains a brain injury in a car accident. The question of capacity is also not straightforward and is about the ability of someone to make specific decisions at a given time. 

“The question to consider is whether the property owner is able to make a decision at the time it needs to be made or whether their ability to do so is impacted due to a cognitive impairment or disturbance that affects the mind.”

She said the people who contact an agent to sell a property on behalf of someone who lacks capacity are therefore likely to be varied. 

Stockdale added: “Do not make assumptions. The first additional hurdle is the due diligence needed to ensure that the client asking you to market and sell or buy a property has the right to do so.”

She said someone may have a Deputyship Order which appoints them as a Deputy but the Order may specifically prohibit the sale of a property without further directions from the Court of Protection. 

Or it may simply be silent on this point, which amounts to the same thing, she sai, adding: “It is important that this Order is available before a transaction proceeds and if an Order is pending at the Court of Protection, expectations are managed about how long process can take.”

Agents are also likely to be involved with a number of people, over and above the Deputy plus the actual owner may still want to be involved.

She highlights that the Deputy may not know much about the property so it is important the agent does their own research, adding: “The Deputy must act in the best interests of the owner and this can be important when considering points such as value or later, any price reductions or negotiations. 

“The Deputy is likely to require clear guidance and recommendations from the agent or a RICS surveyor regarding value and it may take longer to obtain instructions on any negotiation.

“These additional hurdles can easily be addressed to enable transactions to proceed smoothly to completion.”