Are you confused about the difference between a deed of assignment and a power of attorney when it comes to real estate deals? A lot of real estate investors and sellers mix up these two legal documents.

The confusion often lead to costly mistakes in real estate transactions. While both documents play vital roles in real estate, they serve very different purposes. In this article, GLE Properties would explain how these two legal instruments differ and when to use each one in your real estate deals.

What is a Deed of Assignment?

A deed of assignment is a legal document that transfers ownership of a property from one person to another. Whether you buy a house or land, the seller uses this document to transfer full ownership rights to you.

Think of it as the final handover document. Once signed and registered, you become the new legal owner of the property. The deed shows that the seller has given up all claims to the property to you.

Here are the key features of a deed of assignment:

Complete Transfer of Rights: A deed of assignment transfers full ownership rights from the seller to the buyer. After signing, the original owner has no legal claim to the property.

Permanent Document: Once executed, a deed of assignment creates a permanent record of ownership transfer. This document stays with the property forever.

Must Be Registered: For deed transfer to be legally binding on both parties, you must register the deed with the appropriate government body. Without registration, the transfer may not be valid.

What is a Power of Attorney?

A power of attorney is a legal document that gives someone else the right to act on your behalf. In real estate, this means allowing another person to buy, sell, or manage your property for you as the owner.

The person giving the power is called the “principal.” The person receiving the power is called the “agent” or “attorney-in-fact.”

Unlike a deed of assignment, a power of attorney does not transfer ownership. The original owner keeps their property rights. The agent just acts as a representative for the original owner.

Here are the main types of power of attorney in real estate:

General Power of Attorney: General Power of Attorney gives broad powers to handle all your property matters. The agent can buy, sell, rent, or manage your properties on your behalf.

Specific Power of Attorney: This type limits the agent’s powers to specific tasks. For example, you might give someone power to sell only one particular property.

Durable Power of Attorney: This type of Power of Attorney remains valid even if you become unable to make decisions due to illness or injury.

Key Differences Between Deed of Assignment and Power of Attorney

Now that we understand both documents, let’s look at their differences:

Purpose and Function: A deed of assignment transfers ownership permanently. A power of attorney transfers a temporary authority to act for the owner.

Ownership Rights: With a deed of assignment, the buyer becomes the new owner. With a power of attorney, the original owner keeps all rights to the property.

Duration: A deed of assignment creates a permanent change in ownership. A power of attorney can be temporary and may expire or be revoked at any time the owner deems fit.

Legal Effect: The deed creates a new property owner. The power of attorney creates an authorized representative.

When Do You Use Either or Each Document?

Understanding when to use each document gives room to avoid legal problems:

Use a Deed of Assignment When:

  • You are buying or selling property

  • You want to transfer ownership rights permanently

  • You are gifting property to a family member

  • You need to prove legal ownership

Use a Power of Attorney When:

  • You cannot handle property matters by yourself

  • You live far from your property location

  • You are traveling and need someone to manage your real estate portfolio in absential

  • You want help with property management but keep ownership

Also Read:

  1. What You Need to Know about Deed of Assignment When Buying Real Estate in Lagos

  2. What is the Best Land Title in the Lagos Real Estate Market and Why?

Common Mistakes People Make

Many real estate investors make these errors when dealing with these documents:

They Think Both Are the Same: Some people use these documents interchangeably. This confusion can lead to wrong legal advice and costly mistakes.

Using Power of Attorney for Ownership Transfer: A power of attorney cannot transfer ownership. If you want to sell property, you need a deed of assignment, not just a power of attorney.

Not Registering Documents Properly: Both documents must be properly executed and registered. Failure to do this can make them legally useless and worthless.

Forgetting About Revocation: Unlike deeds of assignment, you can cancel a power of attorney when needed. But you must follow proper legal procedures to do this.

Legal Requirements for Each Document

Both documents have specific legal requirements:

For Deed of Assignment:

  • Must be in writing

  • Requires signatures of all parties

  • Needs witnesses to sign

  • Must describe the property clearly

  • Should be registered with government authorities

For Power of Attorney:

  • Must be in writing and signed

  • Requires clear statement of powers given

  • Should specify duration, if temporary

  • Must be notarized in most cases

  • May need registration depending on local laws

Which Document Do You Need?

The choice of document you need depends on your specific situation:

Choose Deed of Assignment If: You want to permanently transfer property ownership rights to a new owner. This applies whether you are buying, selling, or gifting property.

Choose Power of Attorney If: You need someone to handle property matters while you retain ownership. This is common for property management or when you cannot be present for transactions.

Conclusion

Real estate transactions involve complex legal requirements. Both deed of assignment and power of attorney documents must meet very specific legal standards.

Working with seasoned professionals ensures your documents are valid and enforceable, when the need arises. A mistake in either document can cause serious legal and financial problems.

Now that you understand the difference between deed of assignment and power of attorney, what should you do next?

First, always identify what you want to achieve before choosing a document. Are you transferring ownership or just giving someone authority to act for you?

Second and most important, work with experienced real estate professionals. We will help you choose the right legal documents for your property transactions, ensuring everything meets up with legal compliance.

Remember, these documents serve different purposes in real estate. A deed of assignment transfers ownership permanently, while a power of attorney gives temporary authority to act on your behalf. Understanding this difference protects your property investments and prevents costly legal mistakes.