Given that it is a common practice in the UAE to use general and specific/special powers of attorney for various transactions, it is important that the key differences between these two types of powers of attorney are well understood before you make a decision to choose any one of them. This post aims to clarify the key differences to help you understand the concept of general and special powers of attorney. We have outlined below 4 key differences for your understanding:
Broad Vs. specific
The key difference between a general and a special power of attorney is that general power of attorney is used for broad purposes such as giving powers to carry out the day to day affairs of an individual and representation before any third parties and government departments to carry out various transactions in general. It is important to note that the general power of attorney may not always be accepted by the third parties or government departments as they might request for the powers to be specified in the power of attorney. A special power of attorney (also known as specific power of attorney) is the answer to resolve any issues that a general power of attorney may face in acceptability. A special power of attorney would typically outline the transaction that the attorney/agent is authorized on your behalf in specific terms with the details of the subject matter. For example, if you are permitting someone to sell your property in the UAE, the special power of attorney will contain the details of the property and the fact that you are authorizing the attorney/agent to sell the property to any third party. A general power of attorney may not be accepted by the Dubai land department for the sale of a property. In certain situations, a special power of attorney becomes mandatory in order to allow for the powers to be exercised by your attorney/agent.
Selling Vs. Buying Assets/Property
The other key difference in general and special power of attorney is that general power of attorney can typically be used for buying assets/property on your behalf. It is important to understand that the authorities in the UAE adapt a very conservative approach when it comes to the sale of assets through a power of attorney and in those situations, they always require a special power of attorney to be presented to them. These examples would typically include selling of real estate property, shares in companies and vehicles to any third parties. The UAE authorities intend to ensure that there is no element of dishonesty or fraud when it comes to the sale of any assets on behalf of the principal. A special power of attorney thus ensures and conveys the clear message of the principal when it comes to the authorization for the sale of any assets.
Making the powers of attorney limited to a transaction
A general power of attorney is not specific to any transaction but rather is a general and broad communication of the intentions of the principal. This is typically valid for an unlimited period of time in the Emirate of Dubai and a period of 3 years in the Emirate of Abu Dhabi. However, a special power of attorney is always limited to the transactions specified in the power of attorney. If a special power of attorney is prepared for a sale of property, the power of attorney would automatically become redundant upon the completion of the transfer of property. On the other hand, a general power of attorney may continue to remain valid and it does not rely on any specific transaction to be completed or rather does not become redundant upon the completion of any general transactions that may be carried out by the attorney/agent on your behalf.
Ongoing use of power of attorney
It is important to note that you should make a careful consideration when it comes to giving a general power of attorney to anyone and depending upon the actual requirement and the powers to be given on an ongoing basis. From experience, we have learned that it may not always be a good idea to give a general power of attorney when you are aware of the specific nature of the transaction that you may want your attorney/agent to carry out. You should therefor use caution in terms of choosing your attorney/agent between the general and special powers of attorney.
To conclude, you should give careful consideration on the above 4 points before you decide on the specific nature on the powers and the type of powers of attorney that you wish to use. Just POA can help you decide and determine the right type of the power of attorney that you should use in order to convey the powers in your intended purpose.
