What irrevocable power of attorney means
A power of attorney authorises one person to act on behalf of another.
It is an instrument of delegation. The donor gives the donee authority to do defined things in the donor's name: sign documents, deal with a bank, manage property, complete a transaction.
An irrevocable power of attorney is one expressed to be incapable of being revoked, usually where it is given for valuable consideration and to secure a proprietary interest or an obligation.
What it is not, in any form, is a conveyance. A power of attorney does not transfer ownership. It authorises somebody to deal with property; it does not make them the owner of it.
That is settled in Nigerian law and it is repeated by the courts because the mistake keeps being made. A buyer who paid for land and received a power of attorney has been given authority to deal with somebody else's property, not title to their own.
How it is used
There are legitimate uses, and they are about delegation rather than transfer.
An owner living abroad appointing somebody to manage, let and maintain their property.
A person unable to attend a transaction appointing somebody to execute documents on their behalf.
A lender taking a power to execute a transfer if a borrower defaults, as part of a security package.
A seller giving a buyer authority to pursue the consent and registration process where the seller will be unavailable.
A power of attorney over land should be executed as a deed, and where it relates to a right of occupancy it should be stamped and, where applicable, registered.
The practical drafting points are to define the authority precisely rather than granting it generally, to state the duration or the event on which it ends, and where it is intended to be irrevocable, to state the consideration and the interest it secures.
And for the person relying on a power granted to them, the practical point is to verify it: that it was properly executed, that the donor was who they said they were, and that it has not been revoked or ended by operation of law.
Key features
- Authorises one person to act on behalf of another
- Does not transfer ownership of property
- Should be executed as a deed where it relates to land
- An irrevocable power is usually given for consideration to secure an interest
- Authority should be defined precisely rather than granted generally
- Generally terminates on the death or incapacity of the donor
How this works in Nigeria
The land transaction misuse is the reason this term matters, and it is worth stating bluntly.
A seller cannot or will not execute a deed of assignment, perhaps because the title is imperfect, because consent would raise questions, or because the charges on a transfer are substantial. Instead the buyer is offered an irrevocable power of attorney authorising them to deal with the land, and is told it is as good as a transfer.
It is not. Nigerian courts have consistently held that a power of attorney is not an instrument of transfer and does not convey title. The buyer has authority to act in the seller's name and no ownership.
The practical exposure is severe. The land remains the seller's on every record. It can be sold again by the seller to somebody who takes a deed and registers. It forms part of the seller's estate on their death, and a power of attorney generally terminates on the donor's death, which is precisely when the buyer needs it most. Creditors of the seller can look to it.
So a buyer offered a power of attorney instead of a deed should ask why, because the answer is usually a problem with the title or with the consent process.
Where a power of attorney is legitimately part of the arrangement, it should accompany a deed of assignment rather than replace it, and the deed should be stamped, consented and registered in the ordinary way.
The donee should also understand that the authority ends on the donor's death or incapacity in the ordinary case, and that a power expressed to be irrevocable and given to secure an interest is a narrower exception than sellers describing it usually suggest.
Power of attorney vs deed of assignment vs contract of sale
Three documents that appear in a Nigerian land purchase and do different things.
A contract of sale records the agreement to buy and sell. It creates obligations and gives the buyer an equitable interest once they have paid, and it does not transfer the legal interest.
A deed of assignment transfers the interest. Executed as a deed, stamped, taken for the Governor's consent and registered, it is what actually moves the right of occupancy to the buyer.
A power of attorney authorises somebody to act on another's behalf. It delegates authority and transfers nothing.
A buyer needs the first and the second. The third may accompany them where authority to complete formalities is genuinely needed. A buyer who has only the third has paid for land they do not own.
Limits and risks
The fundamental limitation is that it transfers nothing. Whatever it is called, it is an authority to act.
It also generally terminates on the death or incapacity of the donor, which is the moment a buyer relying on one is most exposed.
Even an irrevocable power is narrower than it sounds. Irrevocability depends on the power being given for consideration and to secure an interest, and it does not convert delegation into ownership.
And a donee acting under a power owes duties to the donor. Using a power granted for one purpose to benefit yourself is a breach, which is another reason the authority should be defined precisely.
Worth knowing
Never accept an irrevocable power of attorney instead of a deed of assignment. It transfers nothing, it generally ends on the seller's death, and a seller offering one instead of a deed usually has a problem with the title they are not telling you about.
Questions people ask
Does a power of attorney transfer ownership of land?
No. Nigerian courts have consistently held that a power of attorney is not an instrument of transfer. It authorises somebody to act on the donor's behalf and conveys no title.
What makes a power of attorney irrevocable?
It is usually expressed to be irrevocable where it is given for valuable consideration and to secure a proprietary interest or an obligation. That is narrower than sellers offering one generally suggest.
Why do sellers offer one instead of a deed?
Usually because there is a problem: an imperfect title, a consent process that would raise questions, or the charges on a transfer. A buyer offered one should ask why before paying.
What happens if the donor dies?
A power of attorney generally terminates on the death or incapacity of the donor, which is exactly when a buyer relying on one instead of a deed most needs it to work.
Is a power of attorney ever appropriate in a land deal?
Yes, alongside a deed of assignment rather than instead of it, where the buyer genuinely needs authority to pursue consent and registration formalities in the seller's name.
How should a power of attorney be executed?
As a deed, and where it relates to a right of occupancy it should be stamped and, where applicable, registered. The authority should be defined precisely rather than granted in general terms.