A Power of Attorney to Sell Red Sea Land No Longer Works at the Counter — Every One Goes to a Committee First

Anyone who bought Red Sea land and holds a power of attorney allowing them to sell it will now find the document stops at the counter. The governorate has issued a single set of rules obliging every competent department and city council to refuse to accept or act administratively on any power of attorney that carries the right to sell — to the holder or to a third party — or to waive property rights, until it has first gone to a high committee for study and a legal opinion, according to Al-Masry Al-Youm.

The same referral applies to any power of attorney officials seriously suspect was drawn up to get around the terms of an allocation contract.

Management powers of attorney are not caught by the rule, provided they are expressly limited to ordinary business: following up utilities, paying fees and arrears, and obtaining licences, without authorising sale or waiver. Departments keep the right to review any such document they suspect of going beyond those limits.

The warning in the small print

The governorate's warning is blunter than the procedure. It said some sale contracts with the first buyer contain explicit clauses under which the contract is void automatically, with the state entitled to recover the land and whatever has been built on it, if the buyer issues a power of attorney to sell to themselves or to anyone else. Other contracts bar transfer to a third party until:

• the building work has been completed
• the final registered contract has been obtained
• three years have passed since the transfer

The governorate's stated reasons are to stop allocation conditions being circumvented, to draw a firm line between ordinary acts of management and acts of sale, and to cut the litigation that follows when the governorate and successive buyers end up with conflicting claims on the same plot.

It also framed the rules as protection for later buyers acting in good faith, by verifying that the chain of transactions is sound and that each step complied with the original contract, and as a way of making its own departments and local units decide similar cases the same way.

The committee is to examine what each power of attorney says, when it was issued and how it relates to the property. The governorate stressed that the mere existence of such a document is not on its own enough to cancel a contract without a full review, and that the committee is also to legalise the position of current owners and of people already holding powers of attorney to sell.

This is the detail behind the assurance the governor gave earlier this week, when he said the power-of-attorney checks would not freeze sales. Al-Masry Al-Youm's report does not say when the mechanism takes effect, how long a referral to the committee will take, or whether any fee applies — the three things an owner waiting on a sale will most want to know.